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22 October, 00:33

he units of Manganese Plus available for sale during the year were as follows: Mar. 1 Inventory 22 units @ $29 $638 June 16 Purchase 31 units @ $30 930 Nov. 28 Purchase 41 units @ $37 1,517 94 units $3,085 There are 18 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems. Enter the answer as a positive number.

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  1. 22 October, 00:38
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    Thus, difference in gross profit = $144 + $144 = $288

    Profit as per FIFO is higher than profit as per LIFO

    Explanation:

    In the given case, as per both the methods computation shall be as follows:

    Date Quantity Rate Amount

    Mar 1 22 units $29 $638

    Jun 16 31 units $30 $930

    Nov 28 41 units $37 $1,517

    Total 94 units $3,085

    Closing units = 18

    That means sales = 94 - 18 = 76 units

    Thus as per LIFO cost = 41 units @ $37 + 31 units @ $30 + 4 units @ $29

    = $2,563

    Closing stock = 18 units @ $29 = $522

    As per FIFO cost = 22 units @ $29 + 31 units @ $30 + 23 units @ $37 = $2,419

    Closing stock = 18 units @ $37 = $666

    Thus, difference of closing stock = $666 - $522 = $144

    Profit as per FIFO is higher by $144

    Cost is higher in LIFO by $2,563 - $2,419 = $144

    Thus, difference in gross profit = $144 + $144 = $288
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