Question

Grays Company has inventory of 10 units at a cost of $10 each on August 1. On August 3, it purchased 20 units at $12 each. 12 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold?

Answer 1

Answer:

$124

Explanation:

The FIFO inventory is a system where the first inventory acquired is the first to be sold.

Out of the 12 units sold, the first 10 would he taken from the inventory of August one and the remaining 2 would be taken from the inventory of August three.

Cost of goods sold = (10 ×$10) + (2 × $12) = $124

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