Question

g A company has beginning inventory of 16 units at a cost of $24 each on February 1. On February 3, it purchases 34 units at $26 each. 22 units are sold on February 5. Using the FIFO periodic inventory method, what is the cost of the 22 units that are sold

Answer 1

$188

Step-by-step explanation:

FIFO method assumes that the units to arrive first will be sold first. Hence the cost of sales will be valued using the prices of earlier or older units.

Cost of Sales = 16 units x $24 + 6 units x $26

= $188

Thus, the cost of the 22 units that are sold is $188.