At the beginning of the current period, Muebles de Pavo Real, a furniture company out of Madrid, Spain, had the following data referring to its inventory at the end of March. They use the FIFO method for costing. They sold 1800 chairs: 300 of type A and 1000 of Type B and 500 of type C. They apply the lower of cost or market to the total inventory. Determine the cost of goods sold. Remember write-downs of inventory are included in the COGS.
Cost/purchases | Type A | Type B | Type C |
March 1—Beginning Inventory | 200- € 200 each | 800 - € 50 each | 250 - € 100 each |
March 10—purchases | 10 - € 205 each | 200 - € 45 each | 125 - € 102 each |
March 15—purchases | | 100 - € 52 each | 250- € 106 each |
March 20—purchases | 90 - € 210 each | | 100 - € 110 each |
March 25—purchases | 150- € 205 each | 175 - € 55 each | |
March 30—purchases | 50 - € 207 each | 450 - € 50 each | |
Market for chairs at end of March
Type A | Type B | Type C |
€ 202 | € 53 | € 90 |
Sales:
Type A: Type B: Type C:
190 @ € 340 500 @ € 75 500 @ € 175
100 @ € 360 400 @ € 80
10 @ € 365 100 @ € 90
Cost using FIFO (10 points)
Type A
Type B
Type C Total:
Value of ending inventory (5 points)
FIFO:
Market
Adjustment: Value of ending Inventory:
Gross Profit Margin:
