Question

g Company uses the perpetual inventory method. Vargas purchased 800 units of inventory that cost $9.00 each. At a later date the company purchased an additional 1,200 units of inventory that cost $10.00 each. Vargas sold 900 units of inventory for $13.00. If Vargas uses a FIFO cost flow method, the amount of cost of goods sold appearing on the income statement will be:

Answer 1

Answer:

$8,200

Explanation:

FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold.

So the cost of goods sold =

800 x $9 = $7200

100 × $10 = $1000

Total cost of goods sold = $7200+$1000 = $8,200

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