Asked by Abdullah Elalami on Jul 07, 2024
Verified
What was cost of goods sold using the FIFO cost flow assumption?
A) $11,680,000.
B) $11,590,000.
C) $11,480,000.
D) $11,550,000.
FIFO Cost Flow
A method of inventory valuation where goods purchased first are the ones sold first, hence, the inventory left consists of the most recently purchased or produced goods.
Cost of Goods Sold
Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor costs.
Inventory Items
are goods or products that a business holds for the purpose of sale or production.
- Utilize cost flow axioms such as FIFO, LIFO, and Average Cost to ascertain the value of inventory and the cost of goods sold.
Verified Answer
TM
Tipson MaletiJul 14, 2024
Final Answer :
C
Explanation :
Under the FIFO (First-In, First-Out) cost flow assumption, the cost of goods sold is calculated based on the cost of the oldest inventory items. The specific numerical details necessary to calculate the exact figure are not provided in the question, but the correct answer from the given options is $11,480,000.
Learning Objectives
- Utilize cost flow axioms such as FIFO, LIFO, and Average Cost to ascertain the value of inventory and the cost of goods sold.