Patricia is a business owner who is trying to determine her cost of goods sold for the current year. She bought 20 units of inventory at $11, then 26 units at $10, and finally 18 units at $14. She sold 30 units at an average price of $16 per unit during the current year and uses FIFO for her inventory valuation. What was her cost of goods sold in the current year, assuming that there was no inventory at the beginning of the year?

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) means that the first units purchased are the first units sold. So, Patricia sold 20 units at $11, then 10 units at $10, and finally 0 units at $14. Therefore, her cost of goods sold is 20 x $11 + 10 x $10 = $320.

Patricia Is a Business Owner Who Is Trying to Determine