Question

Blue Inc. has the following data related to an item of inventory: Inventory, May 1 200 units @ $2.10 Purchase, May 8 800 units @ $2.20 Purchase, May 20 300 units @ $2.25 Inventory, May 31 500 units What is cost of goods sold if Blue uses the FIFO cost flow assumption? (Fill in blanks with numbers only. No $ needed.)

Answer 1

Ans:$1,740 is Correct Answer

Explanation:
Cost of goods sold on FIFO Basis:

FIFO means First in , First out Basis

i.e beginning Item or first item will go first

Number of sale units=800 units

Cost of goods sold=200*$2.10+600*$2.20
=$1,740

Workings:

Closing stock = (Opening Stock + Purchases)-sales
500 units=200+(800+300)-sales
sales=1300-500=800 units

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