Use the following information for questions below
A company had the following inventory activity during April:
$$\begin{array}{l}
\text { }\
\begin{array} { l l l l l}
&&\text {units }&\text { unit cost}&\text { total cost}\
\text { beginning}&\text {inventory }&800&\$10.00&\$8,000\
\text { purchase}&\text {april 6 }&1,400&11.00&15,400\
\text {sale }&\text {april }&(1,500)\
\text {purchase }&\text {april 17}&900&10.50&9,450\
\text {sale }&\text {april 24 }&(900)\
\end{array}
\end{array}$$
-If the company is using a perpetual system and the FIFO cost formula,what is the cost of goods sold closest to?
A)$25,700
B)$25,500
C)$25,200
D)$25,930

Question

Use the following information for questions below
A company had the following inventory activity during April:
$$\begin{array}{l}
\text { }\
\begin{array} { l l l l l} 
&&\text {units }&\text { unit cost}&\text { total cost}\
\text { beginning}&\text {inventory }&800&\$10.00&\$8,000\
\text { purchase}&\text {april 6 }&1,400&11.00&15,400\
\text {sale }&\text {april  }&(1,500)\
\text {purchase }&\text {april  17}&900&10.50&9,450\
\text {sale  }&\text {april  24 }&(900)\
\end{array}
\end{array}$$
-If the company is using a perpetual system and the FIFO cost formula,what is the cost of goods sold closest to?
A)$25,700
B)$25,500
C)$25,200
D)$25,930

Quizplus · Accepted Answer

Under the FIFO (First-In, First-Out) method, the oldest inventory items are sold first. The cost of goods sold (COGS) calculation for the two sales would be as follows:1. For the sale on April (1,500 units):- 800 units from beginning inventory at $10.00 each = $8,000- 700 units from the April 6 purchase at $11.00 each = $7,700Total COGS for the first sale = $15,7002. For the sale on April 24 (900 units), all units would come from the April 6 purchase:- 700 units remaining from the April 6 purchase at $11.00 each = $7,700- 200 units from the April 17 purchase at $10.50 each = $2,100Total COGS for the second sale = $9,800Adding the COGS from both sales gives a total COGS of $25,500.

Use the Following Information for Questions Below a Company Had

Use the Following Information for Questions Below
a Company Had