Practice on FIFO, LIFO and Weighted Average

Toms Wear has 250 T-shirts remaining from last year (2019) at $4 unit cost and for this year he had made a few batches of purchases of T-shirts for his business. Generally the T-Shirts are generic from what he has been selling with only minor variations in colours and printed designs.

On 5th January 2020, Tom bought a batch of 550 T-shirts at $3.80 unit cost. Now,he has 800 T-shirts in his warehouse, ready for business.

On 6 February 2020, due to upcoming CNY, he managed to sell off 700 T-shirts and he has decided to order more from the supplier. This time, he ordered another 800 T-shirts but the cost price has risen to $4.50 per unit. Toms Wear managed to sell all of his T-shirts by the end of June 2020. Hes not going to re-order for the time being.

All the while, Toms Wear is selling the T-shirts at $10 per piece.

Calculate:

1. How the inventory cost is calculated for each sale

2. Calculate how much are the sales revenue and profit earned by the sales of T-shirts in 2020