On December 31st of last year, Wolfson Corporation had in inventory 400 units of its product, which cost $21 per unit to produce. During January, the company produced 800 units at a cost of $24 per unit. Assuming Wolfson Corporation sold 700 units in January, what was the cost of goods sold for the units sold in January (assume FIFO inventory accounting) ?

Question

Marianna Terry

Business

26 September, 21:56

On December 31st of last year, Wolfson Corporation had in inventory 400 units of its product, which cost $21 per unit to produce. During January, the company produced 800 units at a cost of $24 per unit. Assuming Wolfson Corporation sold 700 units in January, what was the cost of goods sold for the units sold in January (assume FIFO inventory accounting) ?

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Brenda Curry · Answer 1

The cost of goods for the units sold is 15600

Explanation:

To get the cost of goods for the units sold, first we must see which units we have to use to make this calculus.

If we use FIFO, first we have to take the units in inventory, then the new ones. So, the 700 units sold are;

400 units at cost $21=8400 (inventory)

300 units at cost $24=7200

Total = 8400+7200=15600