A company uses periodic inventory in connection with FIFO costing. The company began the year with zero inventory balance. They had the following transactions during the year: Purchased 50 units at $4.00 per unit Purchased 100 units at $4.10 per unit Sold 80 units at a price of $12.00 per unit Purchased 60 units at $3.20 per unit Sold 75 units at a price of $12.75 per unit
At the end of the year, they counted the inventory and found 55 units remaining. How much was the Cost of sales for the year? (Please round to the nearest whole dollar.)

Question

Quizplus · Accepted Answer

The cost of sales is calculated using FIFO. The first 80 units sold are from the first two purchases: 50 units at $4.00 and 30 units at $4.10, totaling $322. The next 75 units sold are from the remaining 70 units at $4.10 and 5 units at $3.20, totaling $304. The total cost of sales is $322 + $304 = $626.

A Company Uses Periodic Inventory in Connection with FIFO Costing