Cast Iron Grills, Inc., manufactures premium gas barbecue grills. The company reports inventory and cost of...

90.2K

Verified Solution

Question

Accounting

Cast Iron Grills, Inc., manufactures premium gas barbecuegrills. The company reports inventory and cost of goods sold basedon calculations from a LIFO periodic inventory system. Cast Iron’sDecember 31, 2021, fiscal year-end inventory consisted of thefollowing (listed in chronological order of acquisition):
Units Unit Cost
6,400 $ 400
4,700 500
7,400 600

The replacement cost of the grills throughout 2022 was $700. CastIron sold 34,000 grills during 2022. The company's selling price isset at 200% of the current replacement cost.

Required:
1. & 2. Compute the grossprofit (sales minus cost of goods sold) and the gross profit ratiofor 2022 under two different assumptions. First, that Cast Ironpurchased 35,000 units and, second, that Cast Iron purchased 18,500units during the year.
4. Compute the gross profit (sales minus cost ofgoods sold) and the gross profit ratio for 2022 assuming that CastIron purchased 35,000 units (as per the first assumption) and18,500 units (as per the second assumption) during the year anduses the FIFO inventory cost method rather than the LIFOmethod.

Answer & Explanation Solved by verified expert

4.0 Ratings (657 Votes)

Solution Requirement 12 Under LIFO method it is assumed that inventory purchased last is sold first Sales Units 34000 Selling Price 200Replacement Cost 200700 1400 Cast Iron purchased 35000 units Sales 34000 1400 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member