Don't have a Steve Madden Account yet? New customer? Join SM PASS. Join Now. ALREADY SIGNED UP FOR SM PASS? Signed up in a store? Complete registration to create a Steve Madden account and manage your points. Complete Registration
Using FIFO, you calculate the cost of goods sold expense as follows: In short, you use the first three units to calculate cost of goods sold expense. The cost of the ending inventory asset, then, is $106, which is the cost of the most recent acquisition.The $412 total cost of the four units is divided between $306 cost of goods sold expense for the three units sold and the $106 cost of the one unit in ending inventory.The total cost has been accounted for; nothing has fallen between the cracks.he $412 total cost of the four units is divided between $306 cost of goods sold expense for the three units sold and the $106 cost of the one unit in ending inventory. The total cost has been accounted for; nothing has fallen between the cracks.
Ad. 2. Subtract the quantities sold from your inventory beginning with the earliest date and multiplying them by the purchase cost. 1  Your COGS would be 10 x $1 = $10 plus 5 x $1.50 = $7.50 for a total of $17.50. 2  Your COGS is lower under the FIFO reporting method and your profit is higher as inventory costs rise. Most companies that use the Average Cost Reporting Method compute the average cost of goods on a quarterly basis. 2  The total spent on widgets is $25 when divided by the 20 widgets purchased, each widget cost $1.25. 3  The total COGS under this method is $18.75 (15 x $1.25).