data related to an item of inventory: $$\begin{array} { l l }
\text { Inventory, March } 1 & 100 \text { units } @ \$ 8.10 \
\text { Purchase, March } 7 & 350 \text { units } @\$ 8.50 \
\text { Purchase, March } 16 & 70 \text { units } @\$ 9.10 \
\text { Inventory, March } 31 & 150 \text { units }
\end{array}$$ If Ritz Ltd. uses FIFO, the value assigned to cost of goods sold is
A) $3,105.
B) $3,187.
C) $2,295.
D) $1,369.

Question

data related to an item of inventory: $$\begin{array} { l l } 
\text { Inventory, March } 1 & 100 \text { units } @ \$ 8.10 \
\text { Purchase, March } 7 & 350 \text { units } @\$ 8.50 \
\text { Purchase, March } 16 & 70 \text { units } @\$ 9.10 \
\text { Inventory, March } 31 & 150 \text { units }
\end{array}$$ If Ritz Ltd. uses FIFO, the value assigned to cost of goods sold is
A) $3,105.
B) $3,187.
C) $2,295.
D) $1,369.

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the first units purchased are the first units sold. Therefore, the cost of goods sold is calculated as follows:100 units @ $8.10 = $810350 units @ $8.50 = $2,975Total cost of goods sold = $810 + $2,975 = $3,187

Data Related to an Item of Inventory If Ritz Ltd