ABC Company has the following information: Transaction Units Unit cost Beginning
ID: 2382291 • Letter: A
Question
ABC Company has the following information:
Transaction
Units
Unit cost
Beginning inventory
1000
20
Purchase 1
2500
25
Purchase 2
3500
26
Purchase3
3000
27
Units sold 5500
Required:
1-Choose the best answer:
The cost of goods sold according to FIFO method equal:
A-$30000
B-$60000
C-$40000
D-None of the above
2-Compute the cost of goods available
Transaction
Units
Unit cost
Beginning inventory
1000
20
Purchase 1
2500
25
Purchase 2
3500
26
Purchase3
3000
27
Explanation / Answer
ABC Company has the following information:
Transaction
Units
Unit cost
Beginning inventory
1000
20
Purchase 1
2500
25
Purchase 2
3500
26
Purchase3
3000
27
Units sold 5500
Answer:
1-
cost of goods sold according to FIFO method = 1000*20 + 2500*25 + 2000*26 = $ 134,500
The cost of goods sold according to FIFO method equal:
D-None of the above
2-Compute the cost of goods available
Cost of goods available = 1000*20 + 2500*25 + 3500*26 + 3000*27 = $ 254500
Cost of goods available = $ 254500
Transaction
Units
Unit cost
Beginning inventory
1000
20
Purchase 1
2500
25
Purchase 2
3500
26
Purchase3
3000
27