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Calculate the Gross Profit assuming a Periodic Weighted Average method had been used. The selling price for each items is $500 and a stock take at the end of the month revealed 4 units on hand. PURCHASES SALES Balance Date Quantity Unit Cost Total Cost Quantity Unit Cost Total Cost Quantity Unit Cost Total Bal 12 110 1320 July 10 110 1100 110 220 Aug 4 122 488 118 708 Sept 118 708 Oct 10 115 1150 10 115 1150 Nov 115 920 115 230 Dec 4 127 508 123 738 Jan 4 123 492 123 246 130 260 126.5 506 BACK TO 126.5 Mar 126.5 379.5 126.5 April 128.5 899.5
Expert Answer
Answer
Total Sales for the year = 33 Units
Sales value = 33 x $500 = $16,500 where given each unit is sold for $500
Total Purchases (units) = Sales + Closing Stock = 33 units + 4 units(given) = 37 units
Cost of purchases = Cost of Goods Sold = Opening Stock + Purchases – Closing Stock = 12 units + 37 units – 4units = 45 units
Value of cost of goods sold = No. of Units x Weighted Average Cost
= 45 x $116.544
=$5,245
Weighted Average Cost = $(1320 + 220 + 708 + 1150 + 230 + 738 + 246 + 506 + 126.5 )/45units = $116.544
Calculation of Gross Profit = Sales – Cost of Goods Sold
= $16,500 – $5,245
Gross Profit = $11,255
