Question

Pine Creek Company completed 200,000 units during the year at a cost of $3,000,000. The beginning finished goods inventory was 25,000 units at $310,000. Determine the cost of goods sold for 210,000 units, assuming a FIFO cost flow.?

Answer 1

Answer:

$3,085,000

Explanation:

For computing the cost of goods sold for 210,000 units by using the FIFO method first we have to find out the per unit cost which is shown below:

For beginning inventory

= $310,000 ÷ 25,000 units

= $12.4 per unit

For completed units

= $3,000,000 ÷ 200,000 units

= $15

Now the cost of goods sold would be

= 25,000 units × $12.40 + (210,000 units - 25,000 units) × $25

= $310,000 + 2,775,000

= $3,085,000