Question

a company sells 100 units in june. calculate the cost of goods sold using first-in, first-out.

	units received	unit cost
june 11	20	$2.90
june 18	40	$2.30
june 25	60	$2.20

$? per unit

round to the nearest cent.

Explanation:

Step1: Use FIFO to select units

We use the first - in, first - out (FIFO) method. So we start with the earliest purchases. First, take 60 units from June 4, then 20 units from June 11, and then we need \(100-(60 + 20)=20\) units from June 18.

Step2: Calculate total cost

The cost of the 60 units from June 4: \(60\times2.20 = 132\)
The cost of the 20 units from June 11: \(20\times2.90=58\)
The cost of the 20 units from June 18: \(20\times2.30 = 46\)
Total cost \(=132 + 58+46=236\)

Step3: Calculate cost per unit

Cost per unit \(=\frac{236}{100}=2.36\)

Answer:

\(2.36\)