Use the format in Exhibit 9-1 to compute the ending FIFO inventory and cost of goods...

Use the format in Exhibit 9-1 to compute the ending FIFO inventory and cost of goods sold assuming: $600,000 in sales Beginning inventory 1125 units @ $175 Purchases of 890 units @ $150 450 units @ $165 200 units @ $140 Ending inventory 845 units Using the FIFO method, what is the cost of goods sold percentage of sales? Use the format in Exhibit 9-1 to compute the ending FIFO inventory and cost of goods sold assuming: $560,000 in sales Beginning inventory 1125 units @ $175 Purchases of 890 units @ $150 450 units @ $165 200 units @ $140 Ending inventory 845 units What is the cost of goods sold?

Expert Solution

Case 1 ) under FIFO(First In First out ) MEthod ,units acquired first are sold first ,so ending inventory are left out of lastest or last purchase .

Cost of goods available for sale : [1125*175]+[890*150]+[450*165]+[200*140]

= 196875+ 133500+ 74250+ 28000

= 432625

Ending Inventory : [200*140] + [450*165]+ [195*150]

= 28000+ 74250+ 29250

= $ 131500

**845-200-450=195 units are sold from purchase 1

Cost of goods sold = cost of goods available for sale -Ending inventory

= 432625- 131500

= $ 301125

cost of goods sold percentage of sales =cost of goods sold /Sales

= 301125 /600000

= .5019 or 50.19%

jeff jeffy answered 2 years ago

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