Question

1. Vargas Company uses the perpetual inventory system and the FIFO cost flow method. During the current year, Vargas purchased 400 units of inventory that cost $15.00 each. At a later date during the year, the company purchased an additional 800 units of inventory that cost $18.00 each. Vargas sold 500 units of inventory for $27.00. What is the amount of cost of goods sold that will appear on the current year's income statement?

Select one:

a. $6,000

b. $4,500

c. $5,700

d. $7,800

2. Anton Co. uses the perpetual inventory system and FIFO cost flow method. During the year, Anton purchased 480 units of inventory that cost $5 each and then purchased an additional 660 units of inventory that cost $10 each. If Anton sells 800 units of inventory, what is the amount of cost of goods sold?

Select one:

a. $5600

b. $7400

c. $4000

d. $8000

Answer 1