Answer:
Ending inventory= $5,140
Explanation:
Giving the following information:
Mar. 1: Beginning inventory 1,000 $7.20
Mar. 10: Purchase 600 units for $7.25
Mar. 16: Purchase 800 units for $7.30
Mar. 23: Purchase 600 for $7.35
Marvin sold 2,300 units of inventory during the month.
Under the FIFO (first-in, first-out) method, the ending inventory is calculated using the cost of the last units purchased.
First, we need to calculate the number of units in ending inventory:
Ending inventory in units= total units - units sold
Ending inventory in units= 3,000 - 2,300= 700 units
Ending inventory= 600*7.35 + 100*7.3= $5,140
Answer:
$5,140
Explanation:
The FIFO method of inventory valuation is one in which items purchase first are sold first. This is specially important for inventory with expiry dates or perishable inventory item.
Date Transaction Number of Units Unit Cost
Mar. 1 Beginning inventory 1,000 $7.20
Mar. 10 Purchase 600 $7.25
Mar. 16 Purchase 800 $7.30
Mar. 23 Purchase 600 $7.35
Total available 3,000
Marvin sold 2,300 units. The sale would have included 1000 units from Mar 1, 600 units from Mar 10, 700 units from Mar 16
Balance = (100 * $7.30) + ($7.35 * 600)
= $730 + $4,410
= $5,140
