Question

The inventory data for an item for Nov. are: Nov. 1 Inventory 20 units at $20 4 Sold 10 units 10 Purchased 30 units at $24 17 Sold 20 units 30 Purchased 10 units at $22 Using the perpetual system, costing by the first-in, first-out method (FIFO), what is the cost of the merchandise inventory of 30 units on Nov 30?

Answer 1

The cost of the merchandise inventory of 30 units on Nov 30 = $700

Explanation:

given,

Nov. 1 Inventory 20 units at $20

4 Sold 10 units

10 Purchased 30 units at $24

17 Sold 20 units

30 Purchased 10 units at $22

Units sold on 4th is out of Nov 1 inventory = (10 x 20)

= $200

30 units on November 30th cost is =

= 20 x $24 + 10 x $22

= $700

The cost of the merchandise inventory of 30 units on Nov 30 = $700