Use the following information for questions below
A company had the following inventory activity during June:
$\begin{array}{lrrr}
&{\text { Units }}& {\text { Unit Cost }} & {\text { Total Cost }}\\hline
&450 & \$ 9.50 & \$ 4,275\
Beginning~ inventory~ Purchases:\
~~~~~~~~~~~June ~5&1,500 & 10.00 & 15,000 \
~~~~~~~~~~~June ~13&900 & 10.25 & 9,225 \
Sales:\
~~~~~~~~~~~June~ 8&1,100 & & \
~~~~~~~~~~~June~ 24&600 & &
\end{array}$
-If the company is using a FIFO cost formula and a periodic system,what is the cost of goods sold?
A)$17,225
B)$17,000
C)$16,775
D)$16,500

Question

Quizplus · Accepted Answer

Under the FIFO (First-In, First-Out) method in a periodic system, the cost of goods sold is calculated based on the oldest inventory costs first. The company sold 1,100 units on June 8 and 600 units on June 24, totaling 1,700 units sold during June.1. The first 450 units are from the beginning inventory at $9.50 each = $4,275.2. The next 1,250 units (to complete the 1,100 units sold on June 8) are from the June 5 purchase at $10.00 each = $12,500.3. For the sale on June 24 (600 units), we continue using the June 5 purchase for the remaining 250 units = $2,500 (250 units * $10.00) and 350 units from the June 13 purchase at $10.25 each = $3,587.50 (350 units * $10.25).Adding these amounts together gives us the cost of goods sold:$4,275 (beginning inventory) + $12,500 (first part of June 5 purchase) + $2,500 (remaining part of June 5 purchase) + $3,587.50 (part of June 13 purchase) = $22,862.50.However, there seems to be a mistake in my calculation as the total does not match any of the provided options. Let's correct the calculation based on the FIFO method:1. 450 units from beginning inventory at $9.50 each = $4,275.2. 1,100 units sold on June 8 come from the beginning inventory and the June 5 purchase:   - All 450 units from the beginning inventory are sold, and 650 units from the June 5 purchase (1,100 - 450 = 650) at $10.00 each = $6,500.3. 600 units sold on June 24 come from the remaining June 5 purchase and the June 13 purchase:   - The remaining 850 units from the June 5 purchase (1,500 - 650 = 850) are available, so all 600 units are taken from this batch at $10.00 each = $6,000.The corrected calculation for the cost of goods sold is:- From the beginning inventory: $4,275- From the June 5 purchase for the first sale: $6,500- From the June 5 purchase for the second sale: $6,000Total cost of goods sold = $4,275 + $6,500 + $6,000 = $16,775.

Use the Following Information for Questions Below a Company Had

Use the Following Information for Questions Below
a Company Had