Assuming that Beech Soda uses the FIFO flow assumption, the 28 units of this product in inventory at January 31 have a total cost of:
A) $400.
B) $395.
C) $405.
D) $410.

Question

Quizplus · Accepted Answer

Under the FIFO flow assumption, the cost of the last units purchased is assumed to be the cost of goods sold (COGS). Therefore, the remaining inventory is composed of units with a cost equal to the earliest purchase. From the information given, the cost per unit of the earliest purchase was $14.50. Thus, the 28 units in inventory have a total cost of $14.50 x 28 = $405. Therefore, the correct answer is (C) $405.

Assuming That Beech Soda Uses the FIFO Flow Assumption, the 28