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6 January, 23:50

Serene Stereos has the following inventory dа ta:

Nov. 1 Inventory 22 units @ $4.40 each

8 Purchase 89 units @ $4.75 each

17 Purchase 44 units @ $4.65 each

25 Purchase 67 units @ $4.90 each

A physical count of merchandise inventory on November 30 reveals that there are 74 units on hand. Cost of goods sold under FIFO is

a. $709.

b. $361.

c. $692.

d. $344.

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Answers (1)
  1. 7 January, 00:01
    0
    correct option is c. $692

    Explanation:

    given data

    Nov 1 Inventory 22 units @ $4.40 each

    8 Purchase 89 units @ $4.75 each

    17 Purchase 44 units @ $4.65 each

    25 Purchase 67 units @ $4.90 each

    to find out

    Cost of goods sold under FIFO

    solution

    we know here unit sold are

    Units sold = (22 + 89 + 44 + 67 - 74) units

    unit sold = 148 units

    so

    goods purchased first is sold off first

    so 22 units will be sold off first costing $4.4 each

    and balance is = (148 - 22) = 126 units

    and 89 units will sold off costing = $4.75 each

    so that balance is = 126-89 = 37 units

    that will sold off costing $4.65 each

    so

    we know as per FIFO

    Cost of goods sold will be here = (22 units @ $4.4) + (89 units @ $4.75) + (37 units @ $4.65)

    Cost of goods sold = $692

    correct option is c. $692
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