Question

A company just starting business made the following four inventory purchases in June: Date Number of Units Purchased Total Cost June 1 100 units $ 360 June 10 150 units 585 June 15 150 units 610 June 28 100 units 520 $2075 A physical count of merchandise inventory on June 30 reveals that there are 240 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

Answer 1

COGS= $985.67

Step-by-step explanation:

Giving the following information:

Date Number of Units Purchased

June 1 100 units $360 ($3.6)

June 10 150 units 585 ($3.9)

June 15 150 units 610 ($4.067)

June 28 100 units 520 ($5.2)

A physical count of merchandise inventory on June 30 reveals that there are 240 units on hand.

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

Units sold= total units - units in ending inventory

Units sold= 500 - 240= 260

To calculate the cost of goods sold under the FIFO (first-in, first-out) method, we need to use the cost of the firsts units incorporated into inventory.

COGS= 100*3.6 + 150*3.9 + 10*4.067

COGS= $985.67