Question

Assume Red Rover began June with 52 units of merchandise inventory, with a cost of $17 per unit. During June, Red Rover purchased and sold goods as follows:

June 8

Purchase

42 units @ $15

14

Sale

60 units @ $40

22

Purchase

28 units @ $25

27

Sale

42 units @ $40

Under the FIFO inventory costing method, how much is Red Rover’s cost of goods sold for the sale on June 14?

A. $510

B. $2,400

C. $1,004

D. $936

After the sale on June 14, what is Red Rover’s cost of the merchandise inventory on hand, assuming that Red Rover uses FIFO? (Reference Question 3 information.)

A. $510

B. $2,400

C. $1,004

D. $936