Anton Company uses the perpetual inventory system and FIFO cost flow method. During the year, Anton purchased 400 units of inventory that cost $12.00 each and then purchased an additional 600 units of inventory that cost $16.00 each. If Anton sells 700 units of inventory, what is the amount of cost of goods sold?
A)$11,200
B)$10,400
C)$8,400
D)$9,600

Question

Quizplus · Accepted Answer

Using FIFO, the first 400 units purchased at $12.00 each are sold followed by 300 units of the 600 units purchased at $16.00 each.

Cost of goods sold = (400 units x $12.00 per unit) + (300 units x $16.00 per unit)

Cost of goods sold = $4,800 + $4,800

Cost of goods sold = $9,600

Anton Company Uses the Perpetual Inventory System and FIFO Cost