Answer to Question #311584 in Microeconomics for lydia

Question

Quarter 2020 Unit purchased Cost per unit Total Purchases (N$) Units sold

1 300 30 9000 300

2 400 35 14000 300

3 400 36 14400 300

4 300 37 11100 300

1400 48500 1200

Inventory at the beginning of the 1st quarter was 500 units at N$29 per unit and inventory at the end of 4th quarter was 700 units.

Required:

2.1 FIFO method calculate the cost of good sold

2.2 LIFO method calculate the cost of good sold

2.3What is the gross profit for the year based on FIFO cost of sales figures given a marginal of 20%

2.4Re - order Level

2.5Mininmum inventory level

Answer 1

The answer to your question is provided in the image: