Perpetual Inventory Using FTFO Beginning inventory, purchases, and sales for Item ER27 are as follows: August 1 Inventory 44 units $23 9 Sale 33 units 13 Purchase 40 units $24 25 Sale 20 units Assuming a perpetual inventory system and using the first in, first-out (FIFO) method, determine () the cost of merchandise sold on August 25 and (b) the inventory on August 31. a. Cost of merchandise sold on August 25 b. Inventory on August 31 X Feedback Check My Work a. When the FIFO method is used, costs are included in cost of merchandise sold in the order in which they were purchased. Think of your Inventory in terms of "layers. Determine how much inventory remains from each layer after each sale b. The ending inventory is made up of the most recent purchases