Question

Patricia is a business owner who is trying to determine the cost of goods sold for 2019. She bought 20 units of inventory at $11, then 26 units at $9, and finally 18 units at $14. She sold 30 units in 2019 and uses FIFO for her inventory valuation. What was her cost of goods sold in 2019, assuming that there was no inventory at the beginning of the year?

Answer 1

Answer:

COGS= $310

Explanation:

Giving the following information:

She bought 20 units of inventory at $11, then 26 units at $9, and finally 18 units at $14.

She sold 30 units in 2019.

Under the FIFO (first-in, first-out) valuation method, the cost of goods sold is calculated using the cost of the firsts units incorporated into inventory.

COGS= 20*11 + 10*9

COGS= $310