Cost of Goods Sold As an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter: Alternative Sales ($50 per unit) Cost of Goods Sold Gross Profit A $500,000 $200,000 $300,000 B 500,000 228,000 272,000 C 500,000 213,333 286,667 The three alternative cost flow assumptions are FIFO, average, and LIFO (the alternatives are not necessarily presented in this sequence). Lee uses the periodic inventory system. The computation of the cost of goods sold under each alternative is based on the following data:
Cost of Goods Sold As an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter: Alternative Sales ($50 per unit) Cost of Goods Sold Gross Profit A $500,000 $200,000 $300,000 B 500,000 228,000 272,000 C 500,000 213,333 286,667 The three alternative cost flow assumptions are FIFO, average, and LIFO (the alternatives are not necessarily presented in this sequence). Lee uses the periodic inventory system. The computation of the cost of goods sold under each alternative is based on the following data:
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter2: Basic Managerial Accounting Concepts
Section: Chapter Questions
Problem 58P: Cost of Goods Manufactured, Income Statement W. W. Phillips Company produced 4,000 leather recliners...
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Cost of Goods Sold
As an accountant for Lee Company, your supervisor gave you the following calculations of the gross profit for the first quarter:
Alternative | Sales ($50 per unit) | Cost of Goods Sold | Gross Profit |
A | $500,000 | $200,000 | $300,000 |
B | 500,000 | 228,000 | 272,000 |
C | 500,000 | 213,333 | 286,667 |
The three alternative cost flow assumptions are FIFO, average, and LIFO (the alternatives are not necessarily presented in this sequence). Lee uses the periodic inventory system. The computation of the cost of goods sold under each alternative is based on the following data:
Units | Cost/Unit | |
Inventory, January 1 | 12,000 | $20 |
Purchase, January 10 | 4,000 | 21 |
Purchase, February 15 | 6,000 | 22 |
Purchase, March 10 | 8,000 | 23 |
1. Prepare schedules proving the cost of goods sold shown here under each of the three alternatives. For average cost.
LEE COMPANY | |||
Schedules of Cost of Goods Sold | |||
For First Quarter Ended March 31 | |||
FIFO | LIFO | Average | |
Beginning inventory | |||
Purchases | |||
Cost of goods available for sale | |||
Less: Ending inventory | |||
Cost of goods sold |
2. Prepare schedules computing the ending inventory (in units) under each of the three alternatives.
Schedules for Ending Inventory | |
Units | |
Beginning inventory | |
Purchases | |
Units available for sale | |
Less: Sales | |
Ending inventory |
Prepare schedules computing the ending inventory (in dollars) under each of the three alternatives. For average cost
FIFO | |
---|---|
Dollars | |
LIFO | |
---|---|
Dollars | |
Average | |
---|---|
Dollars | |
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