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The units of an item available for sale during the year were as follows:
Jan. 1 Inventory 25 units at $45
Mar.4 Purchase 15 units at $50
June 7 Purchase 35 units at $58
Nov. 15 Purchase 20 units at $65
There are 30 units of the item in physical inventory at December 31. The periodic inventory system is used.
Determine the ending inventory cost using FIFO.
$

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Zviko

Answer:

The ending inventory cost using FIFO is $1,880.

Explanation:

FIFO assumes that the first goods received by the business will be the first ones to be delivered to the final customer.

This means that, any remaining inventory will be valued as if they were the latest goods purchased.

Ending inventory cost calculation :

10 units × $58  =   $580

20 units × $65 = $1,300

Total                 = $1,880

Conclusion :

The ending inventory cost using FIFO is $1,880.

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