A company has beginning inventory of 300 units at $ 17.73 each; They purchased 400 units at $ 7.11 each on June 2; On June 15, they also purchased 200 units at $ 13.16 each. A physical count of merchandise inventory at the end of the month revealed that 500 units were sold. What is the cost of goods sold using the FIFO inventory method? Round your answer to the nearest dollar.

Question

Areli Kelly

Business

22 June, 10:45

A company has beginning inventory of 300 units at $ 17.73 each; They purchased 400 units at $ 7.11 each on June 2; On June 15, they also purchased 200 units at $ 13.16 each. A physical count of merchandise inventory at the end of the month revealed that 500 units were sold. What is the cost of goods sold using the FIFO inventory method? Round your answer to the nearest dollar.

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Answers (1)

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Francesca Jacobson · Answer 1

COGS = $6,030

Explanation:

Giving the following information:

Beginning inventory: 300 units at $ 17.73 each

Purchases:

June 2: 400 units at $ 7.11 each

June 15: 200 units at $ 13.16 each.

A physical count of merchandise inventory at the end of the month revealed that 500 units were sold.

First, we need to calculate the units sold:

Units sold = total units - ending inventory

Units sold = 900 - 500 = 400 units

Under the FIFO (first-in, first-out) the cost of goods sold is calculated using the cost of the first units in.

COGS = 300*17.73 + 100*7.11 = $6,030