Given the following data, what is the cost of goods sold as determined under the FIFO method if XYZ Auto Parts sold 350 units at $59 per unit? Number of Units Information Unit Cost Beginning Inventory on 1/1 100 $25 Inventory Purchases on 1/5 300 $23 Fill in the blank with your calculated number. DO NOT include commas, $ signs, period, decimal points, etc., just enter the raw number. Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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### Topic: FIFO Method and Cost of Goods Sold

**Problem Statement:**
Given the following data, determine the **cost of goods sold** using the FIFO method if XYZ Auto Parts sold 350 units at $59 per unit.

**Data Table:**

| Information               | Number of Units | Unit Cost |
|---------------------------|-----------------|-----------|
| Beginning Inventory on 1/1| 100             | $25       |
| Inventory Purchases on 1/5| 300             | $23       |

**Instruction:**
Fill in the blank with your calculated number. **Do not include commas, $ signs, period, decimal points, etc.; just enter the raw number.** Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123

### Solution Explanation:

**FIFO Method:**
FIFO stands for "First-In, First-Out." Under this inventory method, the cost of goods sold is calculated based on the cost of the earliest purchased or produced goods.

1. **Calculate Cost for 350 Units Sold:**
   - Use the beginning inventory first:
     - \( 100 \, \text{units} \times \$25 \, \text{per unit} = \$2500 \)
   - Use the inventory purchased on 1/5 next:
     - \( 250 \, \text{units} \times \$23 \, \text{per unit} = \$5750 \)

2. **Total Cost of Goods Sold:**
   - Total cost = \( \$2500 + \$5750 = \$8250 \)

**Enter 8250 in the web form.**
Transcribed Image Text:### Topic: FIFO Method and Cost of Goods Sold **Problem Statement:** Given the following data, determine the **cost of goods sold** using the FIFO method if XYZ Auto Parts sold 350 units at $59 per unit. **Data Table:** | Information | Number of Units | Unit Cost | |---------------------------|-----------------|-----------| | Beginning Inventory on 1/1| 100 | $25 | | Inventory Purchases on 1/5| 300 | $23 | **Instruction:** Fill in the blank with your calculated number. **Do not include commas, $ signs, period, decimal points, etc.; just enter the raw number.** Webcourses will add commas to your answer automatically. For example, if you calculated the answer to be $24,123, you would only input: 24123 ### Solution Explanation: **FIFO Method:** FIFO stands for "First-In, First-Out." Under this inventory method, the cost of goods sold is calculated based on the cost of the earliest purchased or produced goods. 1. **Calculate Cost for 350 Units Sold:** - Use the beginning inventory first: - \( 100 \, \text{units} \times \$25 \, \text{per unit} = \$2500 \) - Use the inventory purchased on 1/5 next: - \( 250 \, \text{units} \times \$23 \, \text{per unit} = \$5750 \) 2. **Total Cost of Goods Sold:** - Total cost = \( \$2500 + \$5750 = \$8250 \) **Enter 8250 in the web form.**
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