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9 August, 10:53

Grays Company has inventory of 30 units at a cost of $11 each on August 1. On August 3, it purchased 40 units at $12 each. 32 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 32 units that were sold?

a. $360.

b. $354.

c. $960.

d. $150.

e. $358.

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  1. 9 August, 12:52
    0
    total cost of goods sold = $354

    so correct option is b. $354.

    Explanation:

    given data

    inventory = 30 units

    inventory cost = $11 each

    purchased = 40 units

    purchase cost = $12

    sold = 32 units

    solution

    as per FIFO here units are sold from old purchase

    so first here 32 units are sold that is as

    cost of goods sold = 30 * $11

    cost of goods sold = $330

    and remaining 2 unit are

    cost of goods sold = 2 * $12

    cost of goods sold = $24

    so total cost of goods sold = $330 + $24

    total cost of goods sold = $354

    so correct option is b. $354.
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