Music Unlimited carries a large inventory of guitars and other musical instruments. The store uses a perpetual inventory system. Company records indicate the following for a particular line of...

Extracted text: Music Unlimited carries a large inventory of guitars and other musical instruments. The store uses a perpetual inventory system. Company records indicate the following for a particular line of guitars. Gross margin under FIFO is $. Quantity Unit Cost $980 Date Item Gross margin under weighted-average-cost is $ Nov. 1 Balance 4 6. Sale 2 8 Purchase 13 910 The moving-weighted-average-cost method produces a V cost of goods sold (and therefore a higher gross 17 Sale Purchase 4 margin) because unit inventory costs are V in this scenario. While counts 30 8 910 the earlier inventory first, the cost of goods sold. method uses all inventory on hand in determining the The sale price of each guitar was $1,640. E (Click the icon to view the cost of goods sold calculation from the FIFO perpetual inventory record.) E (Click the icon to view the cost of goods sold calculation from the moving-weighted-average-cost perpetual inventory record.) Required Calculate the gross margin for Music Unlimited Store under both the FIFO and the moving-weighted-average-cost methods. Explain why the gross margin is higher under the moving-weighted-average-cost method.


Extracted text: Moving-Weighted-Average Cost Perpetual Inventory Record FIFO Perpetual Inventory Record Quantity Unit Cost Total Cost 980 Date Date Quantity Unit Cost Total Cost Nov. 6 2 980.00 1,960 Nov. 6. 1,960 4 1,960 17 980 1,960 17 919.33 2 1,820 17 910 Total 5,637 6 Total 6. 5,740 Print Done Print Done