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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

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