Question

XYZ Company made the following purchases and had the following sales in the month of December. Date Action Units Price Total Dec. 1 Beginning Inventory 12 @ $8 $96 Dec. 3 Purchase 10 @ $14 $140 Dec.8 Purchase 8 @ $16 $128 Dec.12 Purchase 12 @ $18 $216 Dec. 30 Purchase 10 @ $20 $200 Dec. 31 TOTALS 52 $780 Answer the following questions related to the LIFO, FIFO, and Weighted Average cost flow assumptions: D Question 2 2 pts To answer this question, include only the number. Do not include a dollar sign ($) or any spaces in your answer. If XYZ is using the FIFO cost flow assumption, what would be the cost of the first unit sold in December?

Answer 1

If XYZ follows FIFO cost flow assumption, then the cost of first unit sold in December is 8

REASON-: FIFO stands for first in first out which means the oldest inventory or the inventory in the beginning is sold first. The cost here is not given neither the profit margin to ascertain the cost, therefore we consider price here. So the price per unit in beggining was 8 , therefore it will be sold first at this price under FIFO.