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15 March, 02:42

Hogan Industries had the following inventory transactions occur during 2017: Units Cost/unit Feb. 1, 2017 Purchase 110 $46 Mar. 14, 2017 Purchase 190 $48 May 1, 2017 Purchase 135 $50 The company sold 312 units at $64 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

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  1. 15 March, 04:29
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    The answer is: Gross profit = $2,788

    Explanation:

    Feb. 1 Purchase 110 units $46 per unit March 14 Purchase 190 units $48 per unit May 1 Purchase 135 units $ 50 per unit

    312 units were sold at $64 per unit, tax rate is 30%

    Using FIFO, what is the company's gross profit? We first calculate COGS

    Cost of goods sold - 312 units:

    110 units at $46 per unit = $5,060 190 units at $48 per unit = $9,120 60 units at $50 per unit = $3,000

    Total COGS = $17,180

    Income statement for Hogan Industries 2017

    Total revenue $19,968

    COGS ($17,180)

    Gross profit $2,788

    Taxes 30% ($836.40)

    Net profit $1,951.60
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Home » Business » Hogan Industries had the following inventory transactions occur during 2017: Units Cost/unit Feb. 1, 2017 Purchase 110 $46 Mar. 14, 2017 Purchase 190 $48 May 1, 2017 Purchase 135 $50 The company sold 312 units at $64 each and has a tax rate of 30%.
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