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Anton Co. uses the perpetual inventory system and FIFO cost flow method. During the year, Anton purchased 400 units of inventory that cost $12.00 each and then purchased an additional 600 units of inventory that cost $16.00 each. If Anton sells 700 units of inventory, what is the amount of cost of goods sold?A.$11,200.B.$10,400.C.$8,400.D.$9,600.

Respuesta :

Answer:

Option (D) $9,600

Explanation:

Data provided in the question:

Initial units purchased = 400 @ $12.00 each

Additional units purchased = 600 @ $16.00 each

Number of units sold = 700

Now,

Using the FIFO cost flow method

Out of the 700 units sold,

units sold from Initial purchase will be 400 and the remaining units i.e (700 - 400) 300 units will be sold from the additional purchase

Thus,

Amount  of cost of goods sold

= ( 400 × $12 ) + ( 300 × $16 )

= $4,800 + $4,800

= $9,600

Hence,

Option (D) $9,600

Parrain

Based on the FIFO cost flow method and the units purchased and sold, the cost of goods sold would be D. $9,600.

What is the Cost of Goods sold?

When using FIFO, goods purchased earlier will be sold first.

This means that from the 700 units sold, the 400 units purchased earlier will be sold first and then the other 300 would come from the 600 units bought later.

Cost of goods sold is therefore:

= (400 units x 12 per unit) + (300 units x 16 per unit)

= $9,600

In conclusion, option D is correct.

Find out more on FIFO at https://brainly.com/question/25079423.