Given the following: FIFO method: 16 units left in inventory The cost of goods sold is:
A) $5,000
B) $10,000
C) $4,965
D) $5,225
E) None of these

Question

Given the following: FIFO method: 16 units left in inventory  The cost of goods sold is:
A) $5,000 
B) $10,000 
C) $4,965 
D) $5,225 
E) None of these

Quizplus · Accepted Answer

Since we are using the FIFO method, the cost of the first 84 units sold would be at the rate of $55 per unit ($4,620). Then, the remaining 16 units sold would be at the rate of $52.50 per unit, which gives us a cost of $840. The total cost of goods sold would be $4,620 + $840 = $4,965, which is option C.

Given the Following: FIFO Method: 16 Units Left in Inventory