Use the following information for questions below
A company had the following inventory activity during May:
$\begin{array}{lrccc}
&\text { Units }& \text { Unit Cost } & \text { Total Cost } & \text { Unit Price } \
\hline
Beginning~ inventory&100 & \$ 20.00 & \$ 2,000 & \
Purchase: ~November~3&900 & \$ 21.00 & 18,900 & \
Sale: \quad November ~5&(900) & & & \$ 30.00 \
Purchase: November ~15&1,000 & \$ 21.00 & 21,000 & \
Sale: \quad November~ 28&(900) & & & \$ 30.00
\end{array}$
-If the company uses a perpetual system and the FIFO cost formula,what is the gross margin for the month?
A)$12,100
B)$16,200
C)$16,300
D)$17.100

Question

Use the following information for questions below 
A company had the following inventory activity during May:
$\begin{array}{lrccc}
&\text { Units }& \text { Unit Cost } & \text { Total Cost } & \text { Unit Price } \
\hline
Beginning~ inventory&100 & \$ 20.00 & \$ 2,000 & \
Purchase: ~November~3&900 & \$ 21.00 & 18,900 & \
Sale:  \quad  November ~5&(900) & & & \$ 30.00 \
Purchase: November ~15&1,000 & \$ 21.00 & 21,000 & \
Sale: \quad  November~ 28&(900) & & & \$ 30.00
\end{array}$
-If the company uses a perpetual system and the FIFO cost formula,what is the gross margin for the month?
A)$12,100
B)$16,200
C)$16,300
D)$17.100

Quizplus · Accepted Answer

To calculate the gross margin, we need to calculate the cost of goods sold (COGS) first. Since the company uses FIFO, the cost of the 100 units sold on May 23 will be $3, and the cost of the 150 units sold on May 31 will be $4, making the total COGS for the month $750 + $600 = $1,350.

To calculate the gross margin, we subtract the COGS from the total sales, which is $18,650 - $1,350 = $17,300.

Therefore, the answer is (C) $16,300.

Use the Following Information for Questions Below a Company

Use the Following Information for Questions Below
a Company