# Compare the calculations for gross margin for B76 Company, based on the results of the perpetual inventory calculations using FIFO, LIFO, and AVG.

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

#### Solutions

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FindFindarrow_forward

### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 10, Problem 12PB
Textbook Problem
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## Compare the calculations for gross margin for B76 Company, based on the results of the perpetual inventory calculations using FIFO, LIFO, and AVG.

To determine

Concept introduction:

FIFO (First in first out): In FIFO Method Company issues first that material which is purchased earliest. This method provide highest gross margin in case of inflation.

LIFO (Last in first out): In LIFO Method Company issues first that material which comes in last in inventory. This method provide least gross margin in case of inflation.

Weighted average method: In this method we issue material on random basis, so every type of goods has equal probability.

To compare:

Calculation of gross margin in FIFO, LIFO and weighted average method.

### Explanation of Solution

Gross margin ass per FIFO= Sale value- cost of goods sold

= 290525- 138415

= 152110- 141190

Gross margin as per LIFO= Sale value- cost of goods sold

= 290525- 141190

Gross margin as per weighted average=...

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