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Homework answers / question archive / For October, when the company sold 1,360 units, the following information is available

For October, when the company sold 1,360 units, the following information is available

Accounting

For October, when the company sold 1,360 units, the following information is available.

 

                                        Units                 Unit Cost    Total Cost

October 1 inventory                480                 $22                 $10,560

October 8 purchase               960                 23                   22,080

October 25 purchase            480                 26                   12,480

                                             1,920                                       $45,120

 

Compute the October 31 Ending inventory and the October cost of goods sold using the FIFO method.

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Computation of October 31 Ending inventory and the October cost of goods sold using the FIFO method:

October 31 Ending inventory in Units = Goods available for Sale - Number of Units Sold

= 1,920 - 1,360

= 560 units

 

October 31 Ending inventory in Dollars:

October 25 Purchases = 480*$26 = $12,480

October 8 Purchases = (560-480)*$23 = $1,840

October 31 Ending inventory in Dollars = $14,320

 

October Cost of Goods Sold:

October 1 Inventory = 480*$22 = $10,560

October 8 Purchases = (1,360-480)*$23 = $20,240

October Cost of Goods Sold = $30,800

 

Note: According to FIFO Method units purchased first will be sold out first.

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