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The following units and costs of lawnmower Model 200 were available for sale during the year for...

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Accounting

The following unitsand costs of lawnmower Model 200 were available for sale during theyear for Craftsman Hardware:

Beginning inventory……………..

10 units at $130

First purchase……………………

15 units at $135

Second purchase………………..

30 units at $140

Third purchase……………………

20 units at $145

Craftsman has 35units on hand at the end of the year. What is the dollar amount ofcost of goods sold for the year according to the first-in,first-out method?

Answer & Explanation Solved by verified expert
4.2 Ratings (624 Votes)

Ans. Calculations for Units and cost of Available for sale :
Transaction Units Rate Total
Beginning inventory 10 $130.00 $1,300
First purchase 15 $135.00 $2,025
Second purchase 30 $140.00 $4,200
Third purchase 20 $145.00 $2,900
Cost of goods available for sale 75 $10,425
Number of units in ending inventory =   35 units
Units sold =   Units available for sale - Units in ending inventory
75 - 35
40 units
First - in, First - out Method:
Transaction Units Rate Total
Beginning inventory 10 $130.00 $1,300
First purchase 15 $135.00 $2,025
Second purchase 15 $140.00 $2,100
Cost of goods sold 40 $5,425
*In FIFO method the units that have purchased first (earliest), are released the first one and the ending inventory
units remain from the last (recent) purchases.

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