# Bleistine Company had the following transactions for the month. Calculate the gross margin for the period for each of the following cost allocation methods, using periodic inventory updating. Assume that all units were sold for \$50 each. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 10, Problem 6EB
Textbook Problem
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## Bleistine Company had the following transactions for the month.Calculate the gross margin for the period for each of the following cost allocation methods, using periodic inventory updating. Assume that all units were sold for \$50 each. Provide your calculations.A. first-in, first-out (FIFO)B. last-in, first-out (LIFO)C. weighted average (AVG)

To determine

(a)

Concept introduction:

FIFO (First in first out): In FIFO method, the 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, the 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 calculate:

Gross Margin from FIFO method.

### Explanation of Solution

Gross margin as per FIFO= Sale price- (Total cost-(cost per unit* No of units remaini...

To determine

(b)

Concept introduction:

FIFO (First in first out): In FIFO method, the 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, the 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 calculate:

Gross Margin from LIFO method.

To determine

(c)

Concept introduction:

FIFO (First in first out): In FIFO method, the 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, the 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 calculate:

Gross Margin from weighted average method.

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