FIFO issues oldest stock first Steps:

• Opening inventory: 100 units at $3 each (oldest layer).
• Add receipt: 50 units at $4 each (newer layer).
• Issue 120 units: Take all 100 from oldest layer (100 × $3 =$300), then 20 from next layer (20 × $4 =$80).
• Total issued value: $300 +$80 = $380.

Why B is correct:

• FIFO layers costs by arrival order, so issued units draw sequentially from oldest to newest until quantity is met.

Why the others are wrong:

• A: Matches issuing 120 at weighted average (~$3/unit), but FIFO uses layers, not average.
• C: Matches issuing 100 at $3 ($300) plus 20 at $5.50 (wrong unit cost).
• D: Matches issuing 100 at $3 ($300) plus 20 at $6 (wrong unit cost).

Final answer: B