First In, First Out (FIFO) is an accounting method in which assets purchased or acquired first are disposed of first. It assumes that the remaining inventory consists of items purchased last.
From the question, there are a total of 5 items in the inventory. The first purchase price for 2 items was $50, while the other 3 were purchased at $60 per item.
If one item is sold, under the FIFO method, it was sold for $50. Therefore, the remaining items in the inventory are 1 $50 item and 3 $60 items.
Therefore, the cost will be:
[tex]\Rightarrow50+3(60)=50+180=\$230[/tex]OPTION C is the correct option.
