Question

Use the following data of ​Sales, Inc.: Unit Total Units Units Cost Cost Sold Beginning inventory 16 $3 $48 Purchase on Apr 25 30 8 240 Purchase on Nov 16 12 9 108 Sales 45 ? ? Sales uses a FIFO inventory system. Cost of goods sold for the period is

Answer 1

Answer:

$280

Explanation:

FIFO stands for First in First Out. FIFO method assumes that the first goods received will be the first goods sold. Therefore, Costs of Goods Sold will be valued at the earlier prices.

Calculation of the Cost of Goods Sold will be as follows :

Step 1

Establish first the units sold

Units Sold = 45

Step 2

Then Calculate the cost of those units keeping in mind to start with the earlier units

Cost of Goods Sold = 16 × $3 + 29 × $8

                                 = $280