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

Step-by-step 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

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