Question

The following hammers were available for sale during the year for Helen Tools: Beginning inventory 10 units at $120 First purchase 15 units at $150 Second purchase 30 units at $180 Third purchase 20 units at $195 Helen Tools has 25 hammers on hand at the end of the year. What is the dollar amount of cost of goods sold for the year according to the first-in, first-out method

Answer 1

Answer:

COGS= $7,950

Explanation:

Giving the following information:

Beginning inventory 10 units at $120

First purchase 15 units at $150

Second purchase 30 units at $180

Third purchase 20 units at $195

Helen Tools has 25 hammers on hand at the end of the year.

Under the FIFO method of inventory cost, the cost of goods sold is calculated using the purchasing price of the first units incorporated.

We need to calculate the number of units sold:

Units sold= total units - ending inventory

Units sold= 75 - 25= 50 units

COGS= 10*120 + 15*150 + 25*180= $7,950