Question

Vaughn Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is available. Units Unit Cost Total Cost April 1 inventory 330 $22 $7,260 April 15 purchase 380 26 9,880 April 23 purchase 290 29 8,410 1,000 $25,550 Required:Compute the April 30 inventory and the April cost of goods sold using the FIFO method.

Answer 1

Answer:

Ending inventory= $15,170

COGS= $10,380

Explanation:

Giving the following information:

Units sold= 450

April 1 inventory= 330 units for $22

April 15 purchase= 380 units for $26

April 23 purchase= 290 units for $29

First, we need to calculate the number of units in ending inventory:

Ending inventory units= 1,000 - 450= 550 units

Now, to calculate the ending inventory under the FIFO (First-in, first-out) method, we need to use the cost of the last units incorporated into inventory.

Ending inventory= 290*29 + 260*26= $15,170

COGS= 330*22 + 120*26= $10,380