If a company has opening stock of 10 units (at 1/1/X4) which cost a total of £50, purchases 20 units at £8 per unit in March X4 and a further 30 units at £10 per unit in July X4, and sells 40 units at a price of £15 per unit during X4, what would the profit for X4 be if the company uses FIFO for stock valuation?
2007-11-14 08:50:10 · 3 answers · asked by josieyuen04 2 in Business & Finance ➔ Other - Business & Finance
1.1.04 Brought forward 10 @ $5 = $50
Mar 04 Purchased 20 @ $8 = 160
July 04 Purchased 30 @ $10 = $300
Sold 40 units during 04
Ending balance = 20 units
FIFO assumes that sales are made from the earliest purchases so that what is left in closing stock will be from the latest purchases.
COGS is calculated as:
10 units @ $5 = $50
20 units @ $8 = $160
10 units @ $10 = $100
Total COGS = $310
Sales = 40 x $15 = $600
Then profit is $600 - $310 = $290.
2007-11-14 12:23:00 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
10 @ 50
20 @ 8
10 @ 10
total cost = 310 pounds
40 @ 15 = 600 pounds
Profit = 290.
I'm not sure what you mean by 1/1/x4 or X4. It could make a difference.
2007-11-14 08:58:34 · answer #2 · answered by jay 2 · 1⤊ 0⤋
lol i have no clue what you just said. ask albert einstien. you know you could find out in the internet or from a banker................................
2007-11-14 08:56:05 · answer #3 · answered by Anonymous · 0⤊ 1⤋