A company purchased 130 units for $30 each on January 31.It purchased 150 units for $35 each on February 28.It sold 150 units for $80 each from March 1 through December 31.If the company uses the first-in,first-out inventory costing method,what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

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Quizplus · Accepted Answer

C) 11ea8873_d477_0dab_bb89_f3e08c95d190_TB5026_00 Number of units sold = 150 units. As FIFO is used, 130 units will be valued at $30 per unit (Jan 31) and remaining 20 units will be valued at $35 per unit (Feb 28.)
Cost of Goods Sold = ((130 units × $30) + (20 units × $35)) = $3,900 + $700 = $4,600

A Company Purchased 130 Units for $30 Each on January