At May 1, 2015, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows: 800 units at $7
600 units at $8
The company sold 1,000 units during the month for $12 per unit. Kibbee uses the average cost method. Kibbee's gross profit for the month of May is

Question

Quizplus · Accepted Answer

The average cost per unit is $7.40 ($2,800 ÷ 380 units). The cost of goods sold is $7,400 (1,000 units × $7.40). The gross profit is $4,625 ($12,000 − $7,400).

At May 1, 2015, Kibbee Company Had Beginning Inventory Consisting