Use the following information to answer the following questions.
The 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 20 using the FIFO inventory cost method.
A)$120
B)$180
C)$136
D)$144

Question

Use the following information to answer the following questions.
The 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 20 using the FIFO inventory cost method.
A)$120 
B)$180 
C)$136 
D)$144

Quizplus · Accepted Answer

Using the FIFO method, we assume that the first items purchased are the first ones sold. Therefore, we calculate the cost of goods sold by multiplying the number of units sold (2) by the cost of the oldest units available (purchased on May 10 for $68 each).

Cost of goods sold = 2 x $68 = $136.

Use the Following Information to Answer the Following Questions