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2 years ago

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A company uses a periodic inventory system. On August 1, the company had 6 items of beginning inventory with a cost of $7 per un

it. On August 3, the company purchased 16 units at $14 per unit. then, on August 5, the company sold 12 units. Using FIFO, the cost of 12 units sold is ___?

1 answer:

suter [353]2 years ago

5 0

The cost of 12 units sold is $126 .

<h3>What is FIFO ?</h3>

FIFO is the short form for the accounting method First in First Out , The inventory that has entered first will be exited first .

It is given that

On August 1, the company had 6 items of beginning inventory with a cost of $7 per unit.

On August 3, the company purchased 16 units at $14 per unit.

on August 5, the company sold 12 units

The units that will be sold first will be the those that have taken in first

$7 * 6 + $14* 6

42 + 84

$126

Therefore the cost of 12 units sold is $126 .

To know more about FIFO

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