A company just starting business made the following four inventory purchases in

Question

A company just starting business made the following four inventory purchases in June:
June        1                                  150 units                                $   390
June      10                                  200 units                                     585
June      15                                  200 units                                     630
June      28                                  150 units                                     510
                                                                                                    $2,115

A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is

Answer

$683.

$825.

$1,290.

$1,432.

$683.

$825.

$1,290.

$1,432.

Explanation / Answer

Answer: $1,290 (ans)

The number of untis sold = (150+200+200+150) - 250 = 450 units

The cost is assigned to these units in first in first out method:

So the cost of goods sold are as follows:

Units Sold in$ 150 390 200 585 100 315 ($630* 100/200) Total Cost 1290

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