Question

Beginning Inventory consists of 4 items at $10 each. During the month, the company purchased 3 items for $11 each and it sold 3 items. Using first-in, first-out, Cost of Goods Sold equals ______.

Answer 1

Using first-in, first-out (FIFO), the Cost of Goods Sold equals $30.

What is First-in, First-out (FIFO)?

FIFO is an inventory method that assumes that items that are in store are the first to be sold by the business, while those items that are recently purchased or manufactured will be sold later.

With the FIFO method, the cost of goods sold is based on past costs while the ending inventory costs are based on the most recent costs.

Data and Calculations:

Beginning inventory of 4 items at $10 each = $40 ($10 x 4)

Purchases of 3 items at $11 = $33

Sales = 3 items

Using first-in, first-out (FIFO), the Cost of Goods Sold equals $30 ($10 x 3).

Thus, under FIFO, the Cost of Goods Sold equals $30.

Learn more about FIFO at https://brainly.com/question/24938626