Beginning inventory, purchases, and sales for Item Widget are as follows:
Mar. 1 Inventory 200 units at $8
9 Sale 175 units
13 Purchase 160 units at 9
25 Sale 150 units
Assuming a perpetual inventory system and using the first-in, first-out (FIFO) method, determine (a) the cost of merchandise sold on March 25 and (b) the inventory on March 31.
Answer:
a. Cost of merchandise sold (March 25): 25 units @ $8 $ 200 125 units @ $9 1,125 150 $1,325 b. Inventory, March 31: $315 = 35 units × $9