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Crane Company uses the periodic inventory system. For the current month, the beginning inventory consisted of 485 units that cost $60 each. During the month, the company made two purchases: 720 units at $63 each and 355 units at $65 each. Crane Company also sold 1200 units during the month. Using the FIFO method, what is the amount of cost of goods sold for the month? $72000. $75935. $74145. $75024.

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Answer:

COGS= $74,145

Explanation:

Giving the following information:

Beginning inventory= 485 units that cost $60 each.

Purchases:

720 units at $63 each

355 units at $65 each.

Units sold= 1,200

To calculate the cost of goods sold (COGS) under the FIFO (first-in, first-out), we need to use the cost of the last units incorporated into inventory:

COGS= 485*60 + 715*63

COGS= $74,145