Question

Given the following data, what is cost of goods sold as determined by the FIFO method?

Sales 280 units
Beginning inventory 250 units at $6 per unit
Purchases 128 units at $11 per unit
A. $3,080
B. $1,680
C. $2,320
D, $1,830

Answer 1

The answer is D. $1,830

Step-by-step explanation:

FIFO means First in First out.

It is one of the inventory methods along with LIFO(Last in First out), average weighted cost and specific identification.

FIFO literally means the inventory bought first will be the first to be sold. Leaving the last inventories bought as the ending inventory.

In this question, Cost of Sales according to FIFO is:

250 units x $6 = $1,500

30 units at $11 = $330

Total =. $1,830

Therefore, the cost of sales under this method is $1,830