June Corp.sells one product and uses a perpetual inventory system.The beginning inventory consisted of 10 units that cost $20 per unit.During the current month, the company purchased 60 units at $20 each.Sales during the month totaled 45 units for $43 each.What is the cost of goods sold using the FIFO method?

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Quizplus · Accepted Answer

Under the FIFO method, the cost of goods sold is calculated using the cost of the oldest inventory first. The beginning inventory of 10 units at $20 each is sold first, totaling $200. The remaining 35 units sold come from the 60 units purchased at $20 each, totaling $700. Therefore, the total cost of goods sold is $200 + $700 = $900.

June CorpSells One Product and Uses a Perpetual Inventory System