Lauer Corporation uses the periodic inventory system and has provided the following information about one of their laptop computers:

$$\begin{array}{ll}
\begin{array} { ll }
\text { Date } & \text { Transaction } \
1 / 1 & \text { Beginning Inventory } \
5 / 5 & \text { Purchase } \
8 / 10 & \text { Purchase } \
10 / 15 & \text { Purchase }
\end{array}
\begin{array} { l l}
\text { Number of Units } & \text { Cost per Unit } \
100& \$ 800 \
200 & \$ 900 \
300 & \$ 1,000 \
200 & \$ 1,050
\end{array}
\end{array}$$
During the year,750 laptop computers were sold. What was cost of goods sold using the FIFO cost flow assumption?
A)$717,500
B)$730,000
C)$703,125
D)$725,500

Question

Lauer Corporation uses the periodic inventory system and has provided the following information about one of their laptop computers:

$$\begin{array}{ll}
\begin{array} { ll } 
\text { Date } & \text { Transaction } \
1 / 1 & \text { Beginning Inventory } \
5 / 5 & \text { Purchase } \
8 / 10 & \text { Purchase } \
10 / 15 & \text { Purchase }
\end{array}
\begin{array} { l l} 
\text { Number of Units } & \text { Cost per Unit } \
100& \$ 800 \
200 & \$ 900 \
300 & \$ 1,000 \
200 & \$ 1,050
\end{array}
\end{array}$$
 During the year,750 laptop computers were sold. What was cost of goods sold using the FIFO cost flow assumption?
A)$717,500
B)$730,000
C)$703,125
D)$725,500

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the first units purchased are the first units sold. Therefore, the cost of goods sold for the 750 units sold would be:100 units @ $800 = $80,000200 units @ $900 = $180,000300 units @ $1,000 = $300,000150 units @ $1,050 = $157,500Total cost of goods sold = $717,500

Lauer Corporation Uses the Periodic Inventory System and Has Provided