The Divine Merchandising Corporation began March operations with merchandise inventory of 6 units, each of which cost $27. During March, Divine Merchandising made the following purchases: (1) March 4, 12 units @ $28 per unit, (2) March 15, 18 units @ $30 per unit, (3) March 26, 14 units @ $32 per unit. During March the Divine Merchandising Company sold the following units at a sales price of $48 per unit: March 6, 11 units, March 20, 17 units, and March 28, 12 units. Operating expenses in March were $640. The Company estimates its income taxes expense will be approximately 35% of income before taxes.Using the FIFO inventory method, determine the inventory dollar amount on March 1.

Answer

a) $288

b) $162

c) $180

d) $192

e) $168

I'm not sure how to get the beginning inv please help thanks.

If you looking for the inventory at the beginning of March then you will ignore all of the question except for the beginning. Therefore your answer should be 6 units X the $27/unit= $162.

thanks

To determine the inventory dollar amount on March 1 using the FIFO (First In, First Out) inventory method, you need to calculate the total cost of the merchandise inventory based on the purchases and sales made during the month.

First, let's analyze the purchases and find out the total number of units purchased in March.

1) March 4: 12 units @ $28 per unit = 12 x $28 = $336
2) March 15: 18 units @ $30 per unit = 18 x $30 = $540
3) March 26: 14 units @ $32 per unit = 14 x $32 = $448

Next, let's calculate the total cost of units sold during March:

1) March 6: 11 units
2) March 20: 17 units
3) March 28: 12 units

To calculate the cost of goods sold, we need to determine the cost of each unit sold using the FIFO method. Since the inventory is priced at $27 per unit, this will be the cost of the first 11 units sold. For the subsequent units sold, we need to use the cost of the next purchase(s) made in March.

Let's calculate the cost of goods sold:

1) Cost of goods sold on March 6: 11 units x $27 per unit = $297
2) Cost of goods sold on March 20: 17 units x $28 per unit = $476 (using the March 4 purchase)
3) Cost of goods sold on March 28: 12 units x $30 per unit = $360 (using the March 15 purchase)

Now, let's calculate the total cost of goods sold:
Total cost of goods sold = $297 + $476 + $360 = $1133

To determine the inventory dollar amount on March 1, subtract the cost of goods sold from the purchases:
Beginning inventory on March 1 = Purchases - Cost of goods sold

Purchases = Cost of March 4 purchase + Cost of March 15 purchase + Cost of March 26 purchase
Purchases = $336 + $540 + $448 = $1324

Beginning inventory on March 1 = $1324 - $1133 = $191

Therefore, the inventory dollar amount on March 1 using the FIFO method is $191.
So the correct answer is option d) $192.