A company purchased 120 units for $ 20 each on January 31. It purchased 170 units for $ 30 each on February 28. It sold 170 units for $ 60 each from March 1 through December 31. If the company uses the firstminusin, firstminusout inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

$2,730

Explanation:

The computation of the Cost of Goods Sold is shown below:-

Cost of goods sold =  Purchase × Each Unit + (Sold units - Each unit) × Purchase units

= 120 units × $20 + 110 units × $30

= $2,400 + $330

= $2,730

Therefore we have calculated the cost of goods sold from First in the first-out method by applying the above formula.

The correct answers on Edg. are:

A.) What can go wrong?

D.) What is the likely return?

E.) Is the risk worth the return? :)