A company had beginning inventory of 12 units at a cost of $15 each on March 1. On March 2, it purchased 12 units at $24 each. On March 6 it purchased 7 units at $20 each. On March 8, it sold 28 units for $63 each. Using the perpetual FIFO inventory method, what was the cost of the 28 units sold?

Question

Business

Danica Perez

24 February, 08:15

A company had beginning inventory of 12 units at a cost of $15 each on March 1. On March 2, it purchased 12 units at $24 each. On March 6 it purchased 7 units at $20 each. On March 8, it sold 28 units for $63 each. Using the perpetual FIFO inventory method, what was the cost of the 28 units sold?

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Answers (1)

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Hadley Myers · Answer 1

The cost of the 28 units sold is $548

Explanation:

In the given question,

On March 1 it purchase 12 units for $15 = 12 units * $15 = $180

On March 2 it purchase 12 units for $24 = 12 units * $24 = $288

On March 6 it purchase 7 units for $20 = 7 units * $20 = $140

And, on march it sold 28 units for $63 each

The 28 units could be taken from

12 * $15 = $180

12 * $24 = $288

And remaining 4 units * $20 = $80

So, the total cost of units sold = $180 + $288 + $80 = $548