Inventory & Cost of Goods Sold
What the goods you sold actually cost, and how fast the shelf turns over.
Pen and paper is fine · no calculator needed why?
Opens at level 36.
Lesson and untimed practice
Read the full lesson and try each skill without a clock. About 3 minutes to read.
skills · practice stats
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Cost of goods sold from counts not tried yet
worked example
Beginning inventory is $10,300, purchases are $26,200, and ending inventory is $10,200. What is cost of goods sold?
Answer: $26,300.00
- Goods available: $10,300 + $26,200 = $36,500.
- Minus what's still on the shelf: $36,500 − $10,200 = $26,300.
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FIFO cost of goods sold not tried yet
worked example
You bought 100 units at $1.50 and later 190 units at $4.50. You sell 193 units. Using FIFO (oldest units first), what is cost of goods sold?
Answer: $568.50
- FIFO sells the oldest units first.
- First 100 at $1.50 = $150; the next 93 at $4.50 = $418.50.
- Total: $150 + $418.50 = $568.50.
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Weighted-average unit cost not tried yet
worked example
You bought 40 units at $14 and 160 units at $12. What is the weighted-average cost per unit?
Answer: $12.40
- Total cost: 40 × $14 + 160 × $12 = $560 + $1,920 = $2,480.
- $2,480 ÷ 200 units = $12.40 per unit.
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Inventory turnover not tried yet
worked example
Cost of goods sold for the year is $294,000 and average inventory is $49,000. What is inventory turnover?
Answer: 6
- Turnover = cost of goods sold ÷ average inventory = $294,000 ÷ $49,000 = 6.
- The shelf emptied and refilled about 6 times this year.
rest ladder
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