During 2009, Accent Toys plc., which began business in October of that year, pur

Question

During 2009, Accent Toys plc., which began business in October of that year, purchased 10,000 units of a toy at a cost of L10 per unit in October.

The Toy sold well in October In anticipation of heavy December sales; Accent purchased 5,000 additional units in November at a cost of L11 per unit.

During 2009, Accent sold 12,000 units at a price of L15 per unit. Under the (FIFO) WHAT IS ACCENT

During 2009, Accent Toys plc., which began business in October of that year, purchased 10,000 units of a toy at a cost of L10 per unit in October. The Toy sold well in October In anticipation of heavy December sales; Accent purchased 5,000 additional units in November at a cost of L11 per unit. During 2009, Accent sold 12,000 units at a price of L15 per unit. Under the (FIFO) WHAT IS ACCENT's cost of goods sold for 2009.

Explanation / Answer

FIFO stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first .

so under FIFO,

it is that 10,000 initial toys are sold and 2000 among the later 5000 are sold .

so

cost = 10000*L10+2000*L11 = L122,000 -------ANSWER

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