At May 1, 2014, Heineken Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows: 400 units at $7
600 units at $8
The company sold 1,000 units during the month for $12 per unit. Heineken uses the average cost method. Heineken's gross profit for the month of May is

Question

Quizplus · Accepted Answer

The average cost is $7.50 ($15,000/2,000). The cost of goods sold is $7,500 (1,000 units x $7.50). The gross profit is $4,500 ($12,000 - $7,500).

At May 1, 2014, Heineken Company Had Beginning Inventory Consisting