Berring Sales uses FIFO. The partially completed inventory record for January appears below. On January 14, the company sold 10 units. On January 29, the company sold 50 units. Complete the inventory record and calculate the Cost of goods sold for the month of January. (Please round to the nearest whole dollar.)

Question

Berring Sales uses FIFO. The partially completed inventory record for January appears below.  On January 14, the company sold 10 units. On January 29, the company sold 50 units. Complete the inventory record and calculate the Cost of goods sold for the month of January. (Please round to the nearest whole dollar.)

Quizplus · Accepted Answer

The inventory record can be completed as follows:

| Date   | Units | Cost/Unit | Total Cost |
|--------|-------|-----------|------------|
| Jan 1  | 30    | $15       | $450       |
| Jan 10 | 50    | $19       | $950       |
| Jan 20 | 20    | $21       | $420       |
| Total  | 100   |           | $1,820     |

To calculate the cost of goods sold, we need to determine the cost of the units sold.

On January 14, the company sold 10 units. These units came from the Jan 1 inventory (since FIFO assumes that the first units purchased are the first ones sold), so the cost of these units is:

10 units x $15 = $150

On January 29, the company sold 50 units. These units came from a combination of the Jan 1 and Jan 10 inventories. Specifically, 30 units came from Jan 1 and 20 units came from Jan 10, since the company had already sold all 50 of the Jan 10 units. The cost of these units is:

30 units x $15 (Jan 1 cost) = $450
20 units x $19 (Jan 10 cost) = $380
Total cost of units sold = $450 + $380 = $830

Therefore, the cost of goods sold for January is $150 + $830 = $980. Rounded to the nearest dollar, the answer is $249.

The correct answer is C.

Berring Sales Uses FIFO