The inventory data for an item for November are:

{eq}\begin{array}{|ccc|} \hline \text{Nov. 1}&\text{Inventory}&20 \text{ units at }\$ 19\\ 4&\text{Sold}&10 \text{ units}\\ 10&\text{Purchased}&30 \text{ units at }\$ 20\\ 17&\text{Sold}&20\text{ units}\\ 30&\text{Purchased}&10\text{ units at }\$ 21\\ \hline \end{array} {/eq}

Using a perpetual system, what is the cost of the merchandise sold for November if the company uses FIFO?

Question:

First In, First Out:

First in first out method of inventory valuation is used to determine the value of inventory and cost of goods sold. Under the FIFO method, the inventory from the old purchases is expensed first to the cost of goods sold, and therefore the ending inventory forms part of the recent purchases. Inventory valuation is important to make sure that the financial statements are free from material misstatements.

Answer and Explanation: 1