Question

Grays Company has inventory of 30 units at a cost of $11 each on August 1. On August 3, it purchased 40 units at $12 each. 32 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 32 units that were sold?

a. $360.
b. $354.
c. $960.
d. $150.
e. $358.

Answer 1

Answer:

total cost of goods sold = $354

so correct option is b. $354.

Explanation:

given data

inventory = 30 units

inventory cost = $11 each

purchased =  40 units

purchase cost = $12

sold = 32 units

solution

as per FIFO  here units are sold from old purchase

so first here 32 units are sold that is as

cost of goods sold = 30 × $11

cost of goods sold = $330

and remaining 2 unit are

cost of goods sold = 2 × $12

cost of goods sold = $24

so total cost of goods sold = $330 + $24

total cost of goods sold = $354

so correct option is b. $354.