Given the following data, what is the gross margin if cost of goods sold is determined using the FIFO periodic method? $\begin{array} { | l | l | }
\hline \text { Sales revenue } & 200 \text { units at } \$ 20 \text { per unit } \
\hline \text { Beginning inventory } & 60 \text { units at } \$ 12 \text { per unit } \
\hline \text { Purchases } & 210 \text { units at } \$ 13 \text { per unit } \
\hline
\end{array}$

Question

Given the following data, what is the gross margin if cost of goods sold is determined using the FIFO periodic method? $\begin{array} { | l | l | } 
\hline \text { Sales revenue } & 200 \text { units at } \$ 20 \text { per unit } \
\hline \text { Beginning inventory } & 60 \text { units at } \$ 12 \text { per unit } \
\hline \text { Purchases } & 210 \text { units at } \$ 13 \text { per unit } \
\hline
\end{array}$

Quizplus · Accepted Answer

Gross margin is calculated as Sales Revenue minus Cost of Goods Sold (COGS). Using FIFO, the first items purchased are the first sold. Sales revenue is 200 units at $20 each, totaling $4,000. COGS is calculated by selling the 60 units from beginning inventory at $12 each ($720) and 140 units from purchases at $13 each ($1,820), totaling $2,540. Gross margin is $4,000 (sales revenue) - $2,540 (COGS) = $1,460.

Given the Following Data, What Is the Gross Margin If