LIFO - FIFO Worksheet
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1) Gunwale Surfboards sells professional surfboards and advertised its "Slider X6" board for $220 each in its January catalogue. The boards are produced in small batches by local suppliers. 2) Gunwale had 12 boards in stock at the beginning of 2003 that cost $156 each. The table shows the company's board purchases and sales for the first six months of the year. 3) Gunwale is concerned about rising purchase costs. A large overseas supplier, Johanssons, has offered to supply boards for $150 each in batches of 250, with prices falling for larger orders. Johanssons will brand the boards with Gunwale's logo and is
LIFO - FIFO Worksheet
- 1. UNIDAD EDUCATIVA BILINGÜE NUEVO MUNDO WORK SHEET FOR SOC 03 VER 10 12 12 GRADE __________ NAME: …………………………………… TEACHER: Alex A. / Verónica I. GRADE: 2nd Bach. SECTION: ……………. SUBJECT: Business HL DATE: __/___/__ TYPE: LIFO-FIFO Classwork Gunwale Surfboards A surfboard company, Gunwale Surfboards, advertised its professional “Slider X6” boards in its January catalogue at $220 each. These boards are produced in small batches of between 20 and 25 by local suppliers, who make by hand to order. Each batch has a different design to keep up with current fashion and sometimes incorporates new technology or materials. The suppliers’ prices vary according to raw material costs. The quality, although excellent, varies according to the craftsman involved. Supplies are sometimes delayed by the personal circumstances of the individual supplier. Gunwale Surfboards had twelve boards in stock at the beginning of 2003, that had cost $156 each to purchase. The following are stock purchases and sales for the first six months of the year: Date (2003) Purchases (units) Cost per unit ($) Sales (units) January 140 165 86 February 60 162 93 March 160 170 110 April 60 168 108 May 150 173 125 June 100 170 146 Gunwale Surfboards is concerned about the rising purchase cost of the boards. It has been approached by a large overseas supplier, Johanssons, which is prepared to supply boards more cheaply at $150 each, provided Gunwale Surfboards purchases batches of 250 boards at a time. Prices fall further if batches are larger. The boards are mass-produced, but Johanssons is prepared to brand the boards with a Gunwale Surfboards logo. Gunwale Surfboards is concerned about maintaining quality, but Johanssons is willing to discuss joint quality control measures to ensure high standards and is investing significant amounts into new production equipment. Johanssons have even suggested taking a minority shareholding in Gunwale Surfboards. (a) Using the information in the table calculate the value of closing stock as at the end of June 2003: (i) if the method of valuation is first in, first out (FIFO). (ii) if the method of valuation is last in, first out (LIFO). N.B Calculations should be shown for each month. (b) Calculate the gross profit on the “Slider X6” for the six-month period January to June, using the two methods of stock valuation. Aproved by:______________ Date: 09jan2013 P 6 Num. Of copies: 45 Pages 1 / 1