Harris Corporation's inventory of a particular product includes 200 units purchased at a per-unit cost of $50,and another 100 units purchased at a unit cost of $60.If Harris sells 10 units of this product,the cost of goods sold will be:
A)$500.
B)$550.
C)$660.
D)The answer will depend upon the inventory cost flow assumption in use.

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) depends on the inventory cost flow assumption (e.g., FIFO, LIFO, or average cost) used by the company, which affects how the costs of different inventory purchases are accounted for when sales occur.

Harris Corporation's Inventory of a Particular Product Includes 200 Units