Asked by blake mitchell on Jul 24, 2024
Verified
What is the amount of cost of goods sold for the year according to the FIFO method?
A) $1,380
B) $1,375
C) $1,510
D) $1,250
FIFO Method
FIFO method, or First-In, First-Out, is an inventory costing method where the first items placed into inventory are the first ones sold, used for calculating cost of goods sold and ending inventory.
Cost of Goods Sold
Cost of goods sold is the direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.
Periodic System
An inventory system in which the inventory level is updated and cost of goods sold is calculated at the end of an accounting period.
- Compute the cost of goods sold employing various costing techniques.
Verified Answer
Cost of goods sold for the year using FIFO = 5 units at $61 from the beginning inventory + 15 units at $63 from the first purchase = $305 + $945 = $1,250
Learning Objectives
- Compute the cost of goods sold employing various costing techniques.
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