A company has inventory of 15 units at a cost of $12 each on August 1. On August 5, it purchased 10 units at $13 per unit. On August 12 it purchased 20 units at $14 per unit. On August 15, it sold 30 units. Using the FIFO perpetual inventory method, what is the value of the inventory at August 12 after the sale?
A) $140.
B) $160.
C) $210.
D) $380.
E) $590.

Question

Quizplus · Accepted Answer

Under FIFO, the first units purchased are the first to be sold. After selling 30 units, 15 units at $12 and 15 units at $13 are sold, leaving 5 units at $13 and 20 units at $14. The inventory value is (5 x $13) + (20 x $14) = $65 + $280 = $345.

A Company Has Inventory of 15 Units at a Cost