Question

Anton Co. uses the perpetual inventory method. Anton purchased 1,160 units of inventory that cost $8 each. At a later date the company purchased an additional 1,170 units of inventory that cost $10 each. If Anton uses the FIFO cost flow method and sells 1,650 units of inventory, the amount of cost of goods sold will be:

Answer 1

$14,180

Step-by-step explanation:

The computation of amount of cost of goods sold is shown below:-

(Purchased units × inventory cost) + (Balance × Inventory cost)

= (1,160 × $8) + (490 × $10)

= $9280 + $4,900

= $14,180

Note :- As per First in first out method 1,650 units sold would consist of 1,160 units of first purchases so we got the balance is 490 units (1,650 - 1,160).