Question

Glasgow Enterprises started the period with 70 units in beginning inventory that cost $2.30 each. During the period, the company purchased inventory items as follows. Glasgow sold 260 units after purchase 3 for $10.60 each.
Purchase No. of Items Cost

1 200 $9.00
2 150 $9.30
3 50 $10.50

Glasgow sold 220 units after purchase 3 for $17.00 each.

Glasgow's cost of goods sold under FIFO would be:

a. $1,650.
b. $2,100.
c. $2,310.
d. $1,860.

Answer 1

Answer:

$1,511

Explanation:

Given that,

Beginning inventory = 70 units

Cost of each unit = $2.30

Total Units sold = 220 units after purchase 3 for $17.00 each.

Therefore, the cost goods sold under FIFO would be:

= (Beginning inventory × cost of each unit) + [(Total Units sold - Beginning inventory) × cost of each unit for purchase 1]

= (70 × $2.30) + [(220 - 70) × $9]

= $161 + (150 × $9)

= $161 + $1,350

= $1,511