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

[The following information applies to the questions displayed below.] The following information pertains to Mason Company for Year 2: Beginning inventory 140 units @ $ 42 Units purchased 406 units @ $ 63 Ending inventory consisted of 54 units. Mason sold 492 units at $126 each. All purchases and sales were made with cash. Operating expenses amounted to $3,825. 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.)

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Answer #1

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.)

Unit Unit price Total Cost
Beginning inventory 140 42 5880
Purchase 406 63 25578
Total 546 31458

Sales = 492*126 = 61992

Cost of goods sold :

FIFO LIFO Weighted average
Cost of goods sold (406*63+86*42) = 29190 (140*42+352*63) = 28056 (31458/546*492) = 28347

Gross margin :

FIFO LIFO Weighted average
Gross margin 61992-29190 = 32802 61992-28056 = 33936 61992-28347 = 33645
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