Sergeant Pens maintains its mechanical pencil inventory using the perpetual inventory method. The...
Question:
Sergeant Pens maintains its mechanical pencil inventory using the perpetual inventory method.
The inventory records for November follow:
| Beginning inventory | 40 units @ $5.10 each |
| November 13 purchases | 60 units @ $5.60 each |
| November 26 sales | 75 units @ $9 each |
Using the FIFO inventory costing method, how much will Sergeant Pens report as the cost of goods sold for November?
a. $495
b. $140
c. $400
d. $392.50
FIFO:
FIFO is an inventory cost flow assumption that assumes that older inventory is sold before newer inventory in the course of operations. FIFO is an acronym that stands for First In, First Out.
Answer and Explanation:
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Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average
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Chapter 6 / Lesson 11
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Inventory valuation methods are ways that companies place a monetary value on the items they have in their inventory. Discover different inventory valuation methods, including specific identification, First-In-First-Out (FIFO), Last-In-First-Out (LIFO), and weighted average.
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