Question

The following units of an item were available for sale during the year. What is the total cost of the ending inventory according to FIFO and LIFO?

a) FIFO: $1,443, LIFO: $1,462
b) FIFO: $1,462, LIFO: $1,443
c) FIFO: $1,451, LIFO: $1,454
d) FIFO: $1,454, LIFO: $1,451

Answer 1

The total cost of the ending inventory according to FIFO is $1,454, and according to LIFO, it is $1,451.

Step-by-step explanation:

FIFO stands for First-In, First-Out, which means that the cost of the first units purchased are assumed to be the cost of the first units sold. LIFO stands for Last-In, First-Out, which means that the cost of the last units purchased are assumed to be the cost of the first units sold.

In this question, the total cost of the ending inventory according to FIFO is $1,454, and according to LIFO, it is $1,451.