Maxell Company uses the FIFO method to assign costs to Inventory and cost of goo
ID: 2408207 • Letter: M
Question
Maxell Company uses the FIFO method to assign costs to Inventory and cost of goods sold. The company uses a perlodic Inventory system. Consider the following Information: Date January 1 June 2 November 5 Description Beginning Inventory Purchase Sales # of units 210 75 245 Cost per unit $5 $4 What amounts would be reported as the cost of goods sold and ending inventory balances for the year? Cost of goods sold $1,225: Ending inventory $215 OCost of goods sold $1,365, Ending inventory $180 O Cost of goods sold $1150: Ending inventory $200 Cost of goods sold $1190, Ending inventory $160Explanation / Answer
Calculate cost of goods sold and ending inventory under FIFO :
So answer is d) Cost of goods sold $1190 ; Ending inventory $160
Unit Cost Beginning inventory 210 210*5 = 1050 Purchase 75 75*4 = 300 Total 285 1350 Ending inventory (40*4) 40 160 Cost of goods sold (1350-160) 245 1190