Salmone Company reported the following purchases and sales of its only product.

Question

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using FIFO.

Date           Activities             Units Acquired at Cost                Units Sold at Retail

May 1 Beginning Inventory 210 units @ $16.00

      5 Purchase 250 units @ $18.00

     10 Sales                                                                   170 units @ $26.00

    15 Purchase 130 units @ $19.00

      24 Sales                                                                   120 units @ $27.00

a.$2,260 b.$3,180 c.$1,860 d.$3,580 e.$2,100

Explanation / Answer

The cost assigned to cost of goods sold using FIFO is:

= (170 * $16.00) + (40 * $16.00) + (80 * $18.00)

= $4,800

All the options are incorrect.

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