Serene Stereos has the following inventory dа ta:

Nov. 1 Inventory 22 units @ $4.40 each

8 Purchase 89 units @ $4.75 each

17 Purchase 44 units @ $4.65 each

25 Purchase 67 units @ $4.90 each

A physical count of merchandise inventory on November 30 reveals that there are 74 units on hand. Cost of goods sold under FIFO is

a. $709.

b. $361.

c. $692.

d. $344.

correct option is c. $692

Explanation:

given data

Nov 1 Inventory 22 units @ $4.40 each

8 Purchase 89 units @ $4.75 each

17 Purchase 44 units @ $4.65 each

25 Purchase 67 units @ $4.90 each

to find out

Cost of goods sold under FIFO

solution

we know here unit sold are

Units sold = (22 + 89 + 44 + 67 - 74) units

unit sold = 148 units

so

goods purchased first is sold off first

so 22 units will be sold off first costing $4.4 each

and balance is = (148 - 22) = 126 units

and 89 units will sold off costing = $4.75 each

so that balance is = 126-89 = 37 units

that will sold off costing $4.65 each

so

we know as per FIFO

Cost of goods sold will be here = (22 units @ $4.4) + (89 units @ $4.75) + (37 units @ $4.65)

Cost of goods sold = $692

correct option is c. $692