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ABC Corporation has the following inventory information for March, 2019: Units SUnit cost S Total Cost Beg
ABC Corporation has the following inventory information for March, 2019:
Units SUnit cost S Total Cost Beg. Inv. 2,500 10.50 26,250 Purchase 1 3,200 10.75 34,400 Purchase 2 2,700 11.00 29,700 Purchase 3 2,000 11.25 22,500 Total 10,400 112.850
On March 31, ABC has 2,800 units in ending inventory. Using the periodic FIFO (first-in, first-out) method, what is cost of goods sold (COGS) for March? C. a. 581,550 0 b. S83,450 O c. S83,375 d. S81.350
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Expert Solution
Computation of Cost of Goods Sold for March:
Unit Sold = Total Units Available- Units In Ending Inventory
= 10,400 - 2800
= 7600 Units
According to FIFO Method units purchased first will be sold out first.
So,
Cost of Goods Sold:
Beginning Inventory = 2,500*$10.50 = $26,250
Purchase 1 = 3,200*$10.75 = $34,400
Purchase 2 = (7,600-2,500-3,200)*$11 = $20,900
Cost of Goods Sold = $26,250+$34,400+$20,900 = $81,550
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