Question

Marigold Corp. has the following inventory data: July 1 Beginning inventory 18 units at $19 $342 7 Purchases 63 units at $20 1260

22 Purchases 9 units at $22 198
$1800 A physical count of merchandise inventory on July 30 reveals that there are 30 units on hand. Using the FIFO inventory method, the amount allocated to cost of goods sold for July is? A. $618 B. $1798. C. $582 D. $1182.

Answer 1

Using the FIFO inventory method, we assume that the units sold are the ones purchased first, and the ending inventory consists of the units purchased last. Therefore, the cost of goods sold for July would be calculated as follows:

- July 1 Beginning Inventory: 18 units at $19 = $342
- July 7 Purchases: 18 units at $19 + 18 units at $20 = $702
- July 22 Purchases: 9 units at $19 + 9 units at $20 + 12 units at $22 = $531
- Total Cost of Goods Available for Sale: $1575
- Cost of Goods Sold: 18 units at $19 + 12 units at $20 = $582

Therefore, the answer is C. $582.