Thus, the Cost of Goods Sold under the FIFO method is $2,000 The costs of Refrigerator A and Refrigerator B are $1,000 each.Ĭost of Goods Sold = Cost of Refrigerator A + Cost of Refrigerator B Under the FIFO method, we assume that the refrigerators that are bought first are sold first. Thus, the Cost of Goods Sold under the Specific Identification Method is $2,100.
Under the Specific Identification method, we compute the costs of the refrigerators sold, which are A and D.Ĭost of Goods Sold (COGS) is Calculated as:Ĭost of Goods Sold = Cost of Refrigerator A + Cost of Refrigerator D There are no refrigerators in Opening Stock. Finally, it buys refrigerator E for $1,200. Then, it buys Refrigerator C and D for $1,100 each. The company buys Refrigerator A and Refrigerator B for $1,000 each. The Cost of Goods Sold (COGS) during the year is $45,000.
Its inventory at the beginning of the year is $15,000. has the financial year beginning 1 st January 2018 and ending 31 st December 2018.
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