Assuming that Beech Soda uses the FIFO flow assumption, the cost of goods sold to be recorded at January 14 is:
A) $278.
B) $268.
C) $393.
D) $673.

Question

Quizplus · Accepted Answer

Using the FIFO (first-in, first-out) method, the cost of goods sold includes the cost of the oldest inventory first. In this case, the inventory purchased on January 3 would be used first, followed by the inventory purchased on January 8. Therefore, the cost of goods sold for the 400 units sold on January 14 would be calculated as follows:

(200 units x $1.20) + (200 units x $1.34) = $240 + $268 = $508

Since the cost of goods sold is based on the cost of the oldest inventory first, only the cost of the inventory purchased on January 3 and January 8 are included. The cost of the inventory purchased on January 11 is not included as it was purchased after the 400 units were sold.

Therefore, the cost of goods sold to be recorded at January 14 is $268.

Assuming That Beech Soda Uses the FIFO Flow Assumption, the Cost