Question

Chicken Little started the month with 5 eggs in its inventory that cost $2 each. During the month, Chicken Little bought 30 more eggs that cost $2.50 each. At the end of the month, Chicken Little counted its inventory and found that 8 eggs remained unsold. If Chicken Little uses FIFO periodic, its Cost of Goods Sold for the month is ______.

Answer 1

Answer:

The Cost of Goods Sold for the Month is $65.

Explanation:

FIFO is method that assumes that the inventory that is sold first will be sold first, as the name says First-In First-Out.

First of all, we have to determine the total Eggs that were sold during the month:

Opening Stock         5

Purchases               30

Less: Closing           (8)

⇒ Eggs Sold           27

Out of these 27 eggs, 5 will be from Opening Stock because we have adopted FIFO method whereas the remaining will be from Purchases.

Cost of goods Sold:

(5 * 2) + (22 * 2.50) = 10 + 55 = $65.

Thanks!