192k views
1 vote
June 4

June 11
June 18
June 25
A. $2.26
C. $2.10
Units
Received
70
30
60
40
Unit
Cost
You sell 100 units in
$2.00 June. Calculate the cost
of goods sold using
first-in, first-out.
$3.00
$2.10
$2.40
B. $2.22
D. $2.30

June 4 June 11 June 18 June 25 A. $2.26 C. $2.10 Units Received 70 30 60 40 Unit Cost-example-1
User Kaesha
by
7.7k points

1 Answer

1 vote

Answer:

D. $2.30

Step-by-step explanation:

To put it simply, if it is First-In First-Out (FIFO) method, meaning, whatever comes first, it would be sold first. FIFO method have to start by determining the cost of the oldest inventory.

So logically speaking, if:

June 4 = 70 units × $2.00 = $140

June 11 = 30 units × $3.00 = $90

Total cost for the first 100 units = $140 + $90 = $230

Since the units sold in June is 100 units, therefore:

Cost of Goods Sold = Total cost / Total units

= $230 / 100 units

= $2.30 per unit

Hope it helps. Thanks!

User Hossein Yousefi
by
7.9k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.