Three identical units of Item K113 are purchased during July, as shown below. 1 answer below »
PE 7-1A Cost flow methods
Three identical units of Item K113 are purchased during July, as shown below.
Item JC07
Units
Cost
July
9
Purchase
1
$160
17
Purchase
1
168
26
Purchase
1
176
Total
3
$504
Average cost per unit
$168
($504 ÷ 3 units)
Assume that one unit is sold on July 31 for $225.
Determine the gross profit for July and ending inventory on July 31 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) average cost methods.
