Concord Corporation uses a periodic inventory system. Details for the inventory account for the month of January 2017 are as follows:

Units Per unit price Total

Balance, 1/1/2017 240 $4.00 $960

Purchase, 1/15/2017 120 ... 4.20 504

Purchase, 1/28/2017 120 ... 4.40 528

An end of the month (1/31/2017) inventory showed that 190 units were on hand. If the company uses FIFO and sells the units for $8.00 each, what is the gross profit for the month?

Gross profit = $1150

Explanation:

Giving the following information:

Beginning inventory: 240u*$4.00 = $960

Purchase, (1/15/2017) = 120u*4.20 = $504

Purchase, (1/28/2017) = 120u*4.40 = $528

Ending inventory = 190u

The company uses FIFO (first in, first out).

Sale price = $8.00 each.

What is the gross profit for the month?

First, we need to calculate the number of units sold:

Sold units = Beginning inventory + purchase - ending inventory = 240 + 240 - 190 = 290 units

Revenue = 290*8 = $2320

Cost of goods sold = 240*$4 + 50*4.20 = $1170

Gross profit = $1150