In October, Nicole eliminated all existing inventory of cosmetic items each prod

Question

In October, Nicole eliminated all existing inventory of cosmetic items each product line had exceeded the profits earned. In December, a supplier asked her to sell a prepackaged spa kit. Feeling she could manage a single product line, Nicole agreed. Nicole's Getaway Spa (NGS) would make monthly purchases from the supplier at a cost that included production costs and a transportation charge. NGS would k . The trouble of ordering and tracking eep track of its new inventory using a perpetual inventory system. On December 31. prior year, NGS purchased 10 units at a total cost of $6.50 per unit. Nicole purchased 30 more units at $8.10 in February. In March, Nicole purchased 20 units at $1010 per unit. In May, 60 units were purchased at $9.90 per unit. In June, NGS sold 60 units at a selling price of $12.10 per unit and 40 $10.10 per unit units at

Explanation / Answer

FIFO UNITS COST PER UNIT TOTAL Beginning Inventory 10 6.5 65 Purchases Feb 30 8.1 243 March 20 10.1 202 may 60 9.9 594 Net Purchases 110 1039 Good available for sale 120 1104 Cost of Goods sold Units from Beg. Inv. 10 6.5 65 Units from Feb purchases 30 8.1 243 Units from March purchases 20 10.1 202 Units from May purchases 40 9.9 396 Total cost of Goods sold 100 906 Ending inventory 20 198

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