Beginning Balance of Inventory is 400 Units and the cost is $200 per Unit.

October 5 Company X purchases 400 Units at a cost of $220 per Unit.

October 9 Company X sells 600 units for $500 per Unit.

October 17 Company X purchases 200 Units at a cost of $230 per Unit.

October 27 Company X sells 300 units for $500 per Unit.

October 29 Company X purchases 200 units for $250 per Unit.

Using FIFO Perpetual, what is the COGS for Company X for the month of October?

In this problem, we are calculating the Cost of Goods Sold (COGS) using the **FIFO (First-In, First-Out)** method under a **perpetual inventory system**. This method assumes that the earliest (first) inventory purchased is the first to be sold.

### Inventory Transactions and COGS Calculation:

1. **Beginning Inventory (October 1):**
   - 400 units @ $200/unit
   - **Total cost**: $ 400 \times 200 = 80,000 $

2. **Purchase on October 5:**
   - 400 units @ $220/unit
   - **Total cost**: $ 400 \times 220 = 88,000 $

3. **Sale on October 9:**
   - Company sells 600 units. 
   - Since we are using FIFO, the first 400 units will come from the beginning inventory (costing $200 each), and the next 200 units will come from the purchase on October 5 (costing $220 each).

   - **COGS:**
     - $ 400 \times 200 = 80,000 $ (from beginning inventory)
     - $ 200 \times 220 = 44,000 $ (from October 5 purchase)
     - **Total COGS** for this sale: $ 80,000 + 44,000 = 124,000 $

   - **Remaining Inventory after Sale:**
     - 200 units from

Learn how to calculate the Cost of Goods Sold (COGS) using the FIFO Perpetual Inventory method. This example covers Company X's inventory and sales transactions for October, including detailed calculations for purchases and sales on October 5, 9, 17, 27, and 29. Suitable for college-level accounting students.

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