Question

Glasgow Enterprises started the period with 80 units in beginning inventory that cost $2.00 each. During the period, the company purchased Inventory Items as follows. Glasgow sold 230 units after purchase 3 for $10.00 each Purchase No. of Items 210 Cost $2.50 82.60 53.00 155 Glasgow's cost of goods sold under FIFO would be Multiple Choice Ο φ620 Ο οοο. Ο Ο οιοο. Ο

Answer 1

Option (d) is correct

Under FIFO (First in first out) method, units that were purchased first will be sold first. The 230 units sold will be from the purchases as below:

From beginning inventory: 80 units @ $2 each = $160

From Purchase 1: Remaining 150 (i.e.230 - 80 ) units @ $2.5 each = $375

Total cost of goods sold = $160 + $375 = $535