Aiello, Inc. had the following inventory in fiscal 2016. The company uses the FIFO method of accounting for inventory. Beginning Inventory, January 1, 2016: 130 units @ $15.00 Purchase 200 units @ $18.00 Purchase 50 units @ $13.50 Purchase 110 units @ $15.75 Ending Inventory, December 31, 2016: 120 units The company's cost of goods sold for fiscal 2016 is:

Question

Business

Slade Hunt

22 June, 09:24

Aiello, Inc. had the following inventory in fiscal 2016. The company uses the FIFO method of accounting for inventory. Beginning Inventory, January 1, 2016: 130 units @ $15.00 Purchase 200 units @ $18.00 Purchase 50 units @ $13.50 Purchase 110 units @ $15.75 Ending Inventory, December 31, 2016: 120 units The company's cost of goods sold for fiscal 2016 is:

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Answers (1)

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Parker Blake · Answer 1

COGS = $6090

Explanation:

Giving the following information:

Beginning Inventory, January 1, 2016: 130 units at $15.00

Purchase 200 units at $18.00

Purchase 50 units at $13.50

Purchase 110 units at $15.75

Ending Inventory, December 31, 2016: 120 units

We need to calculate the cost of goods sold.

First, we determine the number of units sold:

Units sold = beginning inventory + purchases - ending inventory

Units sold = 130 + 360 - 120 = 370 units

Now, we can calculate the COGS

Inventory method: FIFO (First-in, first-out).

COGS = 130*$15 + 200*$18 + 40*13.5 = $6090