You own and operate a gasoline station. You started your business on May 1. At your...

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Accounting

You own and operate a gasoline station. You started yourbusiness on May 1. At your site you have one, and only one,30,000-gallon tank for regular, unleaded, 87 octane gasoline. Yourstation sells only 87 octane gasoline.
On April 30, your tank is MT. That same day you take delivery ofthe following amounts of gasoline:
8200 gallons @ $1.88 per gallon
8000 gallons @ $1.97 per gallon
9200 gallons @ $2.10 per gallon
All prices include all taxes and delivery charges
You sold no gas on April 30; you opened business on May 1
Assume no losses due to leaking tanks, evaporation or theft
Sales for May 1 thru 31:
7100 gallons @ $2.249
8800 gallons @ $2.099
6600 gallons @ $2.149
You are to calculate:
A) Average cost per gallon of gas in inventory on April 30
B) Inventory, in gallons, at end of business on May 31
C) Average selling price per gallon for May
D) Gross margin $ for May (gross sales $ of gas minus cost).

Answer & Explanation Solved by verified expert

4.1 Ratings (541 Votes)

All working forms part of the answer Working 1 Total purchases in amount and in gallons Gallons purchased Cost per gallon Amount 820000 1880 1541600 800000 1970 1576000 920000 2100 1932000 See Answer

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Transcribed Image Text

You own and operate a gasoline station. You started yourbusiness on May 1. At your site you have one, and only one,30,000-gallon tank for regular, unleaded, 87 octane gasoline. Yourstation sells only 87 octane gasoline.On April 30, your tank is MT. That same day you take delivery ofthe following amounts of gasoline:8200 gallons @ $1.88 per gallon8000 gallons @ $1.97 per gallon9200 gallons @ $2.10 per gallonAll prices include all taxes and delivery chargesYou sold no gas on April 30; you opened business on May 1Assume no losses due to leaking tanks, evaporation or theftSales for May 1 thru 31:7100 gallons @ $2.2498800 gallons @ $2.0996600 gallons @ $2.149You are to calculate:A) Average cost per gallon of gas in inventory on April 30B) Inventory, in gallons, at end of business on May 31C) Average selling price per gallon for MayD) Gross margin $ for May (gross sales $ of gas minus cost).