Question

A company had beginning inventory of 12 units at a cost of $24 each on March 1. On March 2, it purchased 12 units at $42 each. On March 6 it purchased 7 units at $29 each. On March 8, it sold 28 units for $72 each. Using the FIFO perpetual inventory method, what was the cost of the 28 units sold? $995 $744 $908 $792 $812

Answer 1

In FIFO goods purchased first are sold first.

Sales units = 28

Out of 28 units sold, 12 units are from beginning inventory on March 1st, 12 units are from the purchases on March 2nd and remaining four units are from March 6th purchases.
(12 + 12 + 6 = 28 units sold)

Cost of goods sold = (12 X $24) + (12 X $42) + (4 X $29) = $908

3rd option.