Mccarthy company has inventory of 8 units at a cost of $200 each on october 1. on october 2, it purchased 20 units at $205 each. 11 units are sold on october 4. using the fifo perpetual inventory method, what amount will be reported as cost of goods sold for the 11 units that were sold.

total cost of goods sold = $2215

Explanation:

given data

inventory = 8 units

cost = $200

purchased = 20 units @ 205 each

to find out

amount will be reported as cost of goods sold for the 11 units that were sold

solution

we know as per FIFO method sold unit are from the 8 unit

so beginning inventory on October = 8 × 200 = $1600

and other 3 unit purchase are = 3 × 205 = $615

so

total cost of goods sold are = 1600 + 615

total cost of goods sold = $2215