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16 July, 17:15

The Boxwood Company sells blankets for $38.00 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date Blankets Units Cost

May 03 Purchase 29 $16.00

May 10 Sale 12

May 17 Purchase 38 $18.00

May 20 Sale 15

May 23 Sale 10

May 30 Purchase 40 $19.00

Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.

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  1. 16 July, 17:25
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    Gross Profit for May 798

    Explanation:

    under FIFO

    We need to use units from the beginning of the month first.

    May 10th sale 12 x $16 = 192

    May 20th sale 15 x $16 = 240

    May 23th

    2 x $16 = 32

    8x 1$8 = 144

    Total COGS

    608

    Sales Revenue 37 x 38 = 1,406

    Cost of Good Sold (608)

    Gross Profit for May 798
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