Question

Inventory records for Marvin Company revealed the following: Date Transaction Number of Units Unit Cost Mar. 1 Beginning Inventory 1,000 $ 7.20 Mar. 10 Purchase 600 7.25 Mar. 16 Purchase 800 7.30 Mar. 23 Purchase 600 7.35 ________________________________________ Marvin sold 2,300 units of inventory during the month. Cost of goods sold assuming FIFO would be:

Answer 1

Answer:

$16,660

Explanation:

FIFO method assumes that the units to arrive first will be sold first. Hence the valuation of cost of goods sold is based on earlier prices.

Cost of goods sold = 1,000 x $ 7.20 + 600 x 7.25 + 700 x 7.30

                                = $16,660

Therefore,

Cost of goods sold assuming FIFO would be: $16,660.