we know that
The first-in-first-out method (FIFO), states that the earliest costs (first costs) are assigned to cost of goods sold and the remaining costs (the more recent costs) are assigned to ending inventory.
The FIFO method assumes that the earliest-goods purchased are sold first.
so
in this problem
<u>Part a) </u>cost of ending inventory
<u>Find the total cost</u>
Total cost=200*$2.1+400*$2.2+250*$2.4=$1,900
<u>Find the cost of ending inventory</u>
475-250=225 boxes
Cost of ending inventory=225*$2.20+250*$2.40=$1,095
therefore
<u>the answer Part a) is</u>
The cost of ending inventory is $1,095
<u>Part b</u>) cost of goods sold
we know that
The cost of goods sold is equal to the total cost minus the cost of ending inventory
so
cost of goods sold=$1,900-$1,095=$805
therefore
<u>the answer part b) is</u>
The cost of goods sold is $805
