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Horngren'S Financial And Managerial Accounting
Found in: Page 367

Short Answer

Steel Mill began August with 50 units of iron inventory that cost $35 each. During August, the company completed the following inventory transactions:

Units Unit Cost Unit Sales Price

Aug. 3 Sale 45 $ 85

8 Purchase 90 $ 54

21 Sale 85 88

30 Purchase 15 58

Requirements

5. Compute gross profit for August using FIFO, LIFO, and weighted-average inventory costing methods.

Gross profit under FIFO, LIFO, and average cost is $5,235, $5,140, $5,225 respectively.

See the step by step solution

Step by Step Solution

Step-by-Step SolutionStep 1: Computation of total revenue

Step 2: Gross profit under FIFO

Step 3: Gross profit under LIFO

Step 4: Gross profit under the weighted average method

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