205k views
2 votes
A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $64; Second purchase $76; Third purchase $68. If the company sold two units for a total of $200 and used FIFO costing, the gross profit for the period would be ______.

1 Answer

4 votes

Answer:

$60

Step-by-step explanation:

As we know that

The gross profit is

Gross profit = Sales price - cost price

where,

Cost price is

= $64 + $76

= $140

We considered the first two purchases of the merchandise inventory

And, the sale price is $200

So, the gross profit is

= $200 - $140

= $60

We simply deduct the cost price from the sale price so that the gross profit could arrive

User Patmanpato
by
8.2k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.