Question

A company had beginning inventory of 8 units at a cost of $11 each on March 1. On March 2, it purchased 11 units at $10 each. On March 6 it purchased 5 units at $13 each. On March 8, it sold 22 units for $56 each. Using the FIFO perpetual inventory method, what was the cost of the 22 units sold?

Answer 1

Answer:

$237

Explanation:

From the information given

Using FIFO perpetual inventory method, we have

(8 × 11) + (11 × 10) + (3 × 13)

= 88 + 110 + 39

= 237

Therefore, cost of 22 units sold is $237

Note: FIFO perpetual inventory method is a cost flow tracking system where the first unit of inventory acquired is the first unit of inventory sold. So in this case, we calculated the cost of the first 22 unit acquired.