Question

The following three identical units of Item JC07 are purchased during April:

  Item JC07   Units   Cost  
April 2 Purchase   1   $220  
April 14 Purchase   1   223  
April 28 Purchase   1   226  
Total     3   $669  
Average cost per unit         $223 ($669 ÷ 3 units)

Assume that one unit is sold on April 30 for $301. Determine the gross profit for April and ending inventory on April 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods.

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