Item Beta Units Cost
June 2 Purchase 1 $ 50
12 Purchase 1 60
23 Purchase 1 70
Total 3 $180
Average cost per unit $ 60 ($180 ÷ 3 units)
Assume that one unit is sold on June 27 for $110. Determine the gross profit for June and ending inventory on June 30 using the (a) first-in, first-out (FIFO); (b) last-in, first-out (LIFO); and (c) weighted average cost methods.
Answer:
a. First-in, first-out (FIFO)
b. Last-in, first-out (LIFO)
c. Weighted average cost
Gross Profit Ending Inventory
June June 30
$60 ($110 – $50) $130 ($60 + $70)
$40 ($110 – $70) $110 ($50 + $60)
$50 ($110 – $60) $120 ($60 × 2)