Question

During 2009, Accent Toys Plc., which began business in October of that year, purchased 15,000 units of a toy at cost of $10 per unit in October. The toy sold well in October. In anticipation of heavy December sales, Accept purchased 7,000 additional units in November at a cost of $11 per unit. During 2009, Accent sold 18,000 units at a price of $15 per unit. Under the first in, first out (FIFO) method, what is Accent's cost of goods sold for 2009?

Answer 1

Answer:

$183,000

Explanation:

The computation of the cost of goods sold using the FIFO method is shown below:

= Number of units purchased × per unit + additional units purchased × per unit

= 15,000 units × $10 + 3,000 units × $11

= $150,000 + $33,000

= $183,000

Since there are 18,000 units are sold

out of which 15,000 are at $10 and the remaining 3,000 units are at $11 and the same is to be considered