Question

A company had beginning inventory of 11 units at a cost of $17 each on March 1. On March 2, it purchased 11 units at $28 each. On March 6 it purchased 5 units at $22 each. On March 8, it sold 26 units for $65 each. Using the FIFO perpetual inventory method, what was the cost of the 26 units sold?

Answer 1

Answer:

$583

Explanation:

Under the FIFO method, we considered the first unit first comes out

The computation of the cost of units sold for 26 units is shown below:

The 26 units are taken from

11 units at $17 each, 11 units at $28 each and the remaining 4 units i.e 26 units - 22 units taken at $22 each

So,

= 11 units × $17 + 11 units × $28 + 4 units × $22

= $187 + $308 + $88

= $583