60.1K

Verified Solution

Link Copied!

At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $20. A summary of purchases during the current period follows:

		Units	Unit Cost	Cost
Beginning Inventory		1,000	$20	$20,000
Purchases:	#1	1,800	22	39,600
	#2	800	26	20,800
	#3	1,200	29	34,800

During the current period, Chen sold 2,800 units. a. Assume that Chen uses the first-in, first-out method. Compute its cost of goods sold for the current period and the ending inventory balance.

	Cost of Goods Sold	$Answer?
	Ending Inventory	$Answer?

b. Assume that Chen uses the last-in, first-out method. Compute its cost of goods sold for the current period and the ending inventory balance.

	Cost of Goods Sold	$Answer?
	Ending Inventory	$Answer?

c. Assume that Chen uses the average cost method. Compute its cost of goods sold for the current period and the ending inventory balance.

	Cost of Goods Sold	$Answer?
	Ending Inventory	Answer?

The following data refer to Froning Companys ending inventory.

Item Code	Quantity	Unit Cost	Unit Market
LXC	60	$45	$48
KWT	210	38	34
MOR	300	22	20
NES	100	27	32

Determine the ending inventory amount by applying the lower of cost or market rule to: (a) each item of inventory $Answer? (b) the total inventory. $Answer?

The following table presents sales revenue, cost of goods sold, and inventory amounts for three computer/electronics companies, Dell Inc., Hewlett-Packard Company, and Apple Inc.

$ millions	Fiscal year ending
Dell Inc.	Feb. 3, 2012	Jan. 28, 2011	Jan. 29, 2010
Revenues	$62,071	$61,494	$52,902
Cost of goods sold	48,260	50,098	43,641
Inventory	1,404	1,301	1,051
Hewlett-Packard Company	Oct. 31, 2011	Oct. 31, 2010	Oct. 31, 2009
Revenues (Products only)	$127,245	$126,033	$114,552
Cost of goods sold	65,167	65,064	56,503
Inventory	7,490	6,466	6,128
Apple Inc.	Sep. 24, 2011	Sep. 25, 2010	Sep. 26, 2009
Revenues	$108,249	$65,225	$42,905
Cost of goods sold	64,431	39,541	25,683
Inventory	776	1,051	455

Required: a. Compute the gross profit margin (GPM) for each of these companies for all three fiscal years. (Round your answers to one decimal place.)

	2011	2010	2009
Dell Inc.	Answer%	Answer%	Answer%?
Hewlett-Packard Company	Answer%	Answer%	Answer%?
Apple Inc.	Answer%	Answer%	Answer%?

b. Compute the inventory turnover ratios for the last two fiscal years. (All three firms use FIFO inventory costing.) (Round your answers to one decimal place.)

	2011	2010
Dell Inc.	Answer?	Answer?
Hewlett-Packard Company	Answer?	Answer?
Apple Inc.	Answer?	Answer?

Answer & Explanation Solved by verified expert

See Answer