BExplain the Results of the Weighted-Average Inventory Costing Method Compared

question 78

Essay

$$\begin{array}{l}\begin{array} { l } \text { }&\text { }\\&\text { FIFO }\\\text { Sales revenue }(4,000 \text { units) } & \$ 80,000 \\\text { Cost of goods sold: } & \\\text { Beginning inventory }(1,000 &\\\text { units } @\$ 10 \text { per unit) } & 10,000 \\\text { Purchases ( } 5,000 \text { units } @ \$ 12 & \\\text { per unit) } & 60,000\\\text { Goods available for sale } & \\\text { Ending inventory ( } 2,000 \text { units) } & \\\quad \text { Cost of goods sold } & \\\text { Gross margin } & \\\text { Expenses } &20,000 \\\text { Net income (pretax) }\end{array}\begin{array} { l } \text { }&\text {Weighted }\\\text { LIFO }&\text {Average }\\\$ 80,000 & \$ 80,000 \\&&\\\\10,000 & 10,000 \\\\60,000 & 60,000 \\\\\\\\\\20,000 & 20,000\\\\\end{array}\end{array}$$
B.Explain the results of the weighted-average inventory costing method compared to the FIFO and LIFO costing methods.

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