Under the FIFO cost method,what is the cost of goods sold for January?
A) $17,250
B) $16,500
C) $18,750
D) $18,000

Question

Quizplus · Accepted Answer

Under the FIFO cost method, the cost of goods sold is calculated by assuming that the first inventory items purchased are the first ones sold. In this case, we can follow the inventory purchases and sales:

- January 2: purchased 100 units at $150 = $15,000 
- January 4: purchased 150 units at $160 = $24,000 
- January 6: sold 200 units at $170 
- January 12: purchased 50 units at $170 = $8,500 
- January 18: sold 80 units at $180 
- January 24: purchased 100 units at $190 = $19,000

Using FIFO, the cost of goods sold for the 200 units sold on January 6 is calculated by using the cost of the oldest inventory:

- 100 units at $150 = $15,000 
- 100 units at $160 = $16,000

Total cost of goods sold for January: $15,000 + $2,250 = $17,250.

Under the FIFO Cost Method,what Is the Cost of Goods