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Homework answers / question archive / Saddlery Company sells leather saddles and equipment for horse enthusiasts

Saddlery Company sells leather saddles and equipment for horse enthusiasts

Accounting

Saddlery Company sells leather saddles and equipment for horse enthusiasts. Saddlery uses the perpetual inventory system. The following schedule relates to the company’s inventory for the month of May:

            Cost   Sales

May 1

  Beginning inventory   150 units   $90,000    

5

  Sale   100 units       $78,000

9

  Purchase   50 units   $33,000    

13

  Purchase   200 units   $144,000    

24

  Sale   200 units       $168,000

27

  Sale   50 units       $48,000

30

  Purchase   75 units   $59,400  

Calculate Saddlery Company’s cost of goods sold, gross margin, and ending inventory using FIFO.

Cost of goods sold

  $Enter a dollar amount.

Gross margin

  $Enter a dollar amount.

Ending Inventory

 

$Enter a dollar amount.



Calculate Saddlery Company’s cost of goods sold, gross margin, and ending inventory using weighted-average. (Round calculations for cost per unit to 2 decimal places, e.g. 10.52 and final answers to 0 decimal places, e.g. 61,052.)

Cost of goods sold

  $Enter a dollar amount rounded to 0 decimal places.

Gross margin

  $Enter a dollar amount rounded to 0 decimal places.

Ending Inventory

  $Enter a dollar amount rounded to 0 decimal places.



Which cost formula produced the higher gross margin? (Round answers to 2 decimal places, e.g. 61.05%.)

    Gross Margin Ratio

FIFO

  Enter percentages rounded to 2 decimal places. %

Weighted-average

  Enter percentages rounded to 2 decimal places. %
Select cost formula.                                                                      FIFOWeighted-average produces the higher gross margin.

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