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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.
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.
Expert Solution
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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