Vango,Inc.sells part number 86Z to auto parts stores around the world.Information about part number 86Z is contained in the table below.Vango uses a FIFO periodic inventory system. Determine the cost of goods sold and ending inventory value of part 86Z,if 4,000 units remain unsold in inventory at the end of the accounting period.

Question

Vango,Inc.sells part number 86Z to auto parts stores around the world.Information about part number 86Z is contained in the table below.Vango uses a FIFO periodic inventory system.  Determine the cost of goods sold and ending inventory value of part 86Z,if 4,000 units remain unsold in inventory at the end of the accounting period.

Quizplus · Accepted Answer

To calculate the cost of goods sold, we need to calculate the total cost of the units sold during the accounting period. Using the FIFO periodic inventory system, the cost of the first 5,000 units sold would be $5.40 per unit and the cost of the next 1,000 units sold would be $5.60 per unit, for a total cost of:

(5,000 * $5.40) + (1,000 * $5.60) = $27,200 + $5,600 = $32,800

To calculate the ending inventory value, we can use the cost of the most recent purchase, which was for 4,000 units at a cost of $6.80 per unit. The ending inventory value would be:

4,000 * $6.80 = $27,200

Therefore, the cost of goods sold is $32,800, and the ending inventory value is $27,200. Adding the unsold 4,000 units at a cost of $6.80 per unit, the total ending inventory value would be:

$27,200 + (4,000 * $6.80) = $27,200 + $27,200 = $54,400

Since only option A matches these calculations, the answer is A.

Vango,Incsells Part Number 86Z to Auto Parts Stores Around the World.Information