Given the following data,what is Cost of Goods Sold as determined by the FIFO method?

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Quizplus · Accepted Answer

Using the FIFO method, we assume that the first items purchased are the first items sold. Therefore, we use the cost of the oldest inventory first and work our way forward. Beginning inventory of 20 units at $10 = $200. Next, 60 units were purchased at $12, for a total cost of $720. The cost of goods available for sale is therefore $920. The cost of goods sold is 40 units (the first 40 of the 80 units sold) at $10 and 40 units (the last 40 of the 80 units sold) at $12, for a total cost of $460 + $580 = $1,040.

Given the Following Data,what Is Cost of Goods Sold as Determined