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14 April, 01:27

The Boxwood Company sells blankets for $ 32.00 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date Product Z Units Cost

May 01 Purchase 9 $15.00

May 10 Sale 5

May 17 Purchase 11 $17.00

May 20 Sale 6

May 23 Sale 3

May 30 Purchase 10 $21.00

Assuming that the company uses the perpetual inventory system, determine the cost of goods sold for the sale of May 20 using the FIFO inventory cost method.

(A) $177.00

(B) $162.00

(C) $94.00

(D) $98.00

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  1. 14 April, 01:43
    0
    (C) $94.00

    Explanation:

    The computation of the cost of goods sold for the sale of May 20 is shown below:

    = Remaining units * cost price + remaining units * cost price

    = 4 units * $15 + 2 units * $17

    = $60 + $34

    = $94

    The 4 units come from May 1 and May 10 i. e 9 units - 5 units = 4 units

    And on May 20, the 6 units were sold out of which 4 units were sold at price of $15 and rest 2 units were sold at a price of $17
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