Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the FIFO inventory cost method.

A) $120
B) $180
C) $136
D) $144

Perpetual inventory system

An inventory management system where updates are made continuously to record sales and purchases of inventory.

FIFO inventory cost method

A method to assign costs to inventory that assumes the first items purchased are the first ones sold, primarily affecting the cost of goods sold and ending inventory value.

Cost of merchandise sold

The total cost incurred by a company to sell its merchandise during a specific period, including the cost of the goods themselves plus any additional costs related to their sale.