Question

A company had the following purchases and sales during its first year of operations:Purchases SalesJanuary: 10 units at $120 6 unitsFebruary: 20 units at $125 5 unitsMay: 15 units at $130 9 unitsSeptember: 12 units at $135 8 unitsNovember: 10 units at $140 13 unitsOn December 31, there were 26 units remaining in ending inventory. Using the perpetual FIFO inventory costing method, what is the cost of the ending inventory? (Assume all sales were made on the last day of the month.)

Answer 1

Answer:

Explanation:

FIFO inventory costing method uses the assumption that the first set of inventory is the first to be sold.

                       Purchase

 Month            Unit         rate          Cost

January            10            120           1200

February           20          125           2500

May                   15            130           1950

September       12            135            1620

November        10            140            1400

Total                 67

                         Sales  (FIFO)

January             6            120              720

February           4            120               480

                         1              125               125

May                   9             125               1125

September       8              125              1000

November        2              125               250

                         11               130              1430

                                Closing Inventory

May                 4                  130             520

September     12                 135             1620

November      10                 140             1400

                                                              3540