At May 1, 2022, Mark 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
500 units at $9
The company sold 500 units during the month for $12 per unit. Mark uses the average cost method. Mark's gross profit, to the nearest dollar, for the month of May is

Question

Quizplus · Accepted Answer

To calculate the average cost per unit: [(200 units * $7) + (800 units * $7) + (500 units * $9)] / (200 + 800 + 500) = $8 per unit. The cost of goods sold for 500 units is 500 * $8 = $4,000. The sales revenue is 500 * $12 = $6,000. Gross profit = $6,000 - $4,000 = $2,000.

At May 1, 2022, Mark Company Had Beginning Inventory Consisting