If the company uses the FIFO method,what is the cost of goods sold?
A)$1,620.
B)$2,290.
C)$2,580.
D)$2,706.

Question

Quizplus · Accepted Answer

Using the FIFO method means that we assume that the items that were purchased first are the first ones to be sold. Therefore, we need to calculate the cost of goods sold (COGS) by multiplying the cost of the first 12 units sold (which are the units from the beginning inventory plus the first purchase) by the quantity sold (13 units). This gives us:

COGS = ($170 x 12) + ($176 x 1) x 13
COGS = $2,706

Therefore, the correct answer is D.

If the Company Uses the FIFO Method,what Is the Cost