Question

Niles Co. has the following data related to an item of inventory: Inventory, March 1 400 units @ $2.10 Purchase, March 7 1400 units @ $2.20 Purchase, March 16 280 units @ $2.50 Inventory, March 31 520 units The value assigned to cost of goods sold if Niles uses FIFO is

Niles Co. has the following data related to an item of inventory: Inventory, March 1 Purchase, March 7 Purchase, March 16 Inventory, March 31 400 units @ $2.10 1400 units @ $2.20 280 units @ $2.50 520 units The value assigned to cost of goods sold if Niles uses FIFO is $3392. $3448. $1160. $1104.

Answer 1

Units sold = Units available for sale - Units in ending inventory = (400+1400+280) - 520 = 1560 units. Under Fifo, first available units are sold first. So Calculate 1560 units from beginning = (400*2.10) + (1560 - 400)*2.20 = (400*2.10) + (1160*2.20) = 840 + 2552 = 3392