July 9
16
27
Units of item ABC are purchased during July:
Item ABC
Units
Cost
Purchase
1
$32
Purchase
1
40
Purchase
1
48
3
Total
Average cost per unit
$120
$40 ($120 3 units)
Assume that one unit is sold on July 30 for $66. Determine the gross profit for July and ending inventory on July 31 using the first-in, first out (FIFO) method
a. Gross profit = $34; ending inventory = $80
b. Gross profit = $26; ending inventory = $80
c. Gross profit = $18; ending inventory = $72
d. Gross profit = $34; ending inventory = $88
