Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 440 units. Ending inventory at January 31 totals 170 units. Units Unit Cost Beginning inventory on January 1 400 $ 3.90 Purchase on January 9 90 4.10 Purchase on January 25 120 4.20 Required: Assume the perpetual inventory system is used and then determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

Answer 1

Answer:

Inventory= $709

Explanation:

Giving the following information:

January 1 400 at $3.90

Purchase on January 9: 90 at $4.10

Purchase on January 25:120 at $4.20

On January 26, the company sells 440 units.

Ending inventory at January 31 totals 170 units.

FIFO (first-in, first-out)

Inventory= 120* 4.20 + 50* 4.10= $709

Answer 2

The costs assigned to ending inventory when costs are assigned based on the FIFO method is $709.

The first in first out (FIFO) inventory system is an inventory system where it is assumed that the inventory that is first purchases that is the first to be sold.

Ending inventory is the inventory that remains in the inventory of a company after the sale of inventories.

Ending inventory is 170 units. It would consist of inventory bought on January 25 and January 9.

Total cost of inventory bought in January 25 = 120 x $4.20 = $504

Total cost of inventory bought on January 9 = (170 - 120) x $4.10 = $205

Total cost of ending inventory = $504 + $205 = $709

To learn more about FIFO, please check: https://brainly.com/question/5101734?referrer=searchResults