Question

Olympus Climbers Company has the following inventory data:

July 1 Beginning inventory - 30 units at $19 - $ 570
7 Purchases - 105 units at $20 - 2,100
22 Purchases - 15 units at $22 - 330
Total - $3,000
A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is __________.
A) $930.
B) $990.
C) $2,010.
D) $2,070.

Answer 1

The correct answer is C.

Step-by-step explanation:

Giving the following information:

July 1: Beginning inventory - 30 units at $19

July 7: Purchases - 105 units at $20

July 22: Purchases - 15 units at $22

A physical count of merchandise inventory on July 30 reveals that there are 48 units on hand.

First, we need to determine the number of units sold:

Units sold= total units - ending inventory in units

Units sold= 150 - 48= 102 units

Under the FIFO (first-in, first-out) method, the cost of goods sold is calculated using the price of the firsts units incorporated into inventory.

COGS= 30*19 + 72*20= $2,010