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    JPG1's Avatar
    JPG1 Posts: 1, Reputation: 1
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    #1

    Aug 27, 2012, 08:16 AM
    calculating profits under fifo
    Calculating Holding Gain: Please Help

    beginning inventory for 20x0 250units @ 1.50. Purchased 125units @ 1.80 and sold 200 units @ 2.25. Calculate Profit or holding gain for the year using Fifo.

    1. $60
    2. $90
    3.$112.50
    4 $150.00

    Please help me out with this problem.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Aug 27, 2012, 11:11 AM
    FIFO stands for first in first out so to solave this, your sale of 200 units came from your beginning inventory. So 200 units in beginning inventory times your unit price of $1.50 equals your Cost of Goods Sold amount.

    Your 200 units times your sale price equals your Sales amount.

    The difference between your Sales amount and your Cost of Goods Sold amounts equals your profit.
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