Three identical units of merchandise were purchased during July, as follows: Date Product Basic H Units Cost July 3 Purchase 1 $35 10 Purchase 1 36 24 Purchase 1 37 Total 3 $108 Average cost per unit $36 Assume one unit sells on July 28 for $45. Determine the gross profit, cost of merchandise sold, and ending inventory on July 31 using the (a) first-in, first-out, (b) last-in, first-out, and (c) average cost flow methods.

Answer and Explanation:

The computation is shown below:

Particulars  Gross profit   Cost of merchandise sold  Ending inventory

a. FIFO           $10                $35                                       $73

                   ($45 - $35)                                                    ($108 - $35)

It takes the first cost per unit

b. LIFO            $8                $37                                        $71

                  ($45 - $37)                                                      ($108 - $37)

It takes the last cost per unit

c. Average cost $9              $36                                        $72

                 ($45 - $36)                                                       ($45 - $36)    

It takes the average cost per unit

c is the answer, and do you have a ps4?