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 purchase			60 units @ $5.60 each
November 26 sale			75 units @ $9 each

Using the FIFO inventory-costing method, how much will Sergeant Pens report as cost of goods sold for November?

Select one:

a. 495.00

b. 140.00

c. 400.00

d. 392.50

Answer 1

Ans-

Using the FIFO inventory-costing method, Sergeant Pens report as cost of goods sold for November as follow:

Date	Purchases			Sales			Balance
	Units	Unit Cost	Total	Units	Unit Cost	Total	Units	Unit Cost	Total
Nov.1							40	$5.10	$204
Nov.13	60	$5.60	$336				40	$5.10	$204
							60	$5.60	$336
Nov.26				40	$5.10	$204
				35	$5.60	$196	25	$5.60	$140
Total	60		$336	75		$400	25		$140

Cost of good sold= Opening Stock +Purchase- Closing stock

=$204+$336-$140= $400

Hence, The correct option is c. $400

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