SPECIFIC
This is why you would use specific identification
To value expensive or small inventories of different values.
This is what FIFO stands for
Fist-in-first-out
This is what LIFO stands for
What is Last-In-First-Out
This is what you have to divide to get weighted average
Total cost of goods available
÷
Total units available
What is net sales
$9075
This is the person who invented Specific Identification
Who is Helen Keller?
No negative points awarded
This is the number of ending units
300
This is the reason people would use LIFO
Large amounts of similar inventory that may not be easily accessible
Also tax savings
$7350
Calculate Gross Profit (not from example)
Ending Inventory: 5000
Cost of Merchandise Available: 50,000
Net Sales: 80,000
35,000
Daily Double:
Specifically, how far did Dak get in the playoffs?
DAK SUCKS!!
HE DIDN'T MAKE THE PLAYOFFS!!!
This is the reason to use FIFO
To sell oldest items first. Generally items that will expire or spoil
This is the business that would most likely use LIFO
Kroger
Home Depot
Braums
Car Dealership
Home Depot
This is the reason people use weighted average method
Calculate Gross Profit
Sales 80000
Sales Discounts 4200
Sales Returns & Allowance 700
Cost of Merchandise sold 41000
$34100
This is the value of all inventory as of April 9th
$3275
What is cost of goods sold using the FIFO method
$5700
This is the value of the ending inventory using the LIFO method
What is $1425
This is the cost of goods sold using weighted average method
$5775 (weighted average per unit $5.25) x 300 ending units = $1575
CMA (7350) - Ending Inventory (1575)
=Cost of Merchandise Sold 5775
Recite the gross profit formula(s) used in this chapter
Cost of Merchandise Available
-Ending Inventory
=Cost of Merchandise Sold
-----------------------------------
Net sales
-Cost of Merchandise Sold
=Gross Profit
If there were:
100 units from April 2nd
100 units from April 16th
50 units from April 23rd
50 units from April 30th
What is value of the ending inventory
$1625
This is the gross profit using the FIFO method
$3375
This is the value of
Cost of merchandise sold
$5925
This is the gross profit percentage using weighted average method
Net sales 9075
- COGS 5775
=Gross Profit- 3300 ÷ Net sales 9075=36%
Calculate Gross Profit
Purchases Discounts 2000
Purchase Returns & Allowances 500
Purchases 30000
Ending Inventory 10000
Beginning Inventory 12000
Sales 50000
Sales Returns & Allowances 1000
Sales Discounts 2500
$17000