Question

[The following information applies to the questions displayed below.]

The following information pertains to Mason Company for 2016:

Beginning inventory	120	units	@	$	32
Units purchased	366	units	@	$	48

Ending inventory consisted of 44 units. Mason sold 442 units at $96 each. All purchases and sales were made with cash. Operating expenses amounted to $3,450.

Required

a.	Compute the gross margin for Mason Company using the following cost flow assumptions: (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.)

   

	Gross Margin
FIFO
LIFO
Weighted average

b.

What is the amount of net income using FIFO, LIFO, and weighted average? (Ignore income tax considerations.) (Round cost per unit to 3 decimal places and other intermediate answer and final answers to the nearest whole dollar amount.)

	Net Income
FIFO
LIFO
Weighted average

c.

Compute the amount of ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average. (Round cost per unit to 3 decimal places and final answers to the nearest whole dollar amount.)

	Ending Inventory
FIFO
LIFO
Weighted average

Answer 1

	Unit	Unit cost	Total cost
Beginning inventory	120	32	3840
Purchase	366	48	17568
Total	486		21408

Cost of goods sold unit = 486-44 = 442 Units

	FIFO	LIFO	Weighted average
Cost of goods sold	(120*32+322*48) = 19296	(366*48+76*32) = 20000	(21408/486*442) = 19470

a) Gross margin

	FIFO	LIFO	Weighted average
Gross margin	42432-19296 = 23136	42432-20000 = 22432	42432-19470 = 22962

b) Net profit

	FIFO	LIFO	Weighted average
Net income	23136-3450 = 19686	22432-3450 = 18982	22962-3450 = 19512

c) Ending inventory :

	FIFO	LIFO	Weighted average
Ending inventory	21408-19296 = 2112	21408-20000 = 1408	21408-19470 = 1938