Solution-Recompute the gross margin

Recompute the gross margin

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Reference no: EM132502251

Welch Company accounts for a product it sells using the LIFO periodic inventory procedure. Merchandise inventory on January 1 was 3,000 units at $14.40 each. Product data for the year ended December 31, 2019, are as follows:

	Purchases
	Unit
January 5	6,000
March 31	18,000
August 12	12,000
December 26	6,000

		Sales
Unit Cost		Unit
$9.00	January 10	4,000
10.80	April 2	15,000
13.50	August 22	16,000
14.40	December 24	3,000

Question a. Compute the gross margin earned on sales of this product for 2019.

Question b. Repeat part a, assuming that the December 26 purchase was made in January of 2020.

Question c. Recompute the gross margin, assuming that 10,000 rather than 6,000 units were purchased on December 26 at the same cost per unit.

Question d. Solve parts a, b, and c using the FIFO method.

Reference no: EM132502251

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Recompute the gross margin

Reference no: EM132502251

Reference no: EM132502251

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