Question

[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.)

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