Question

Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1. Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 10 using the FIFO inventory cost method. Units Date May 3 Cost $20 10 Blankets Purchase Sale Purchase Sale Sale Purchase O $90 $72 $60 $100

Answer 1

(C) $60

Explanation:

There was no opening inventory at the beginning of May 1. Therefore, the only purchases made for the sale affected on May 10 was the purchase made on May 3.

The cost of sale made on May 10 = 3 units purchased at a cost of $20 i.e. 3 units * $20 i.e. $60