Question

Hill Company uses the periodic inventory system. For the current month, the beginning inventory consisted of 1,200 units that cost $60 each. During the month, the company made two purchases: 500 units at $58 each and 2,000 units at $56 each. Hill Company also sold 2,150 units during the month. Using the periodic FIFO method, what is the cost of ending inventory

Answer 1

$86,800

Step-by-step explanation:

With regards to the above, first we need to add up all the units

= 1,200 units + 500 units + 2,000 units

= 3,700 units

The next step is to deduct the additional units sold from the total units

= 3,700 units - 2,150 units

= 1,550 units

The next step is to multiply $56, which is the value for last 2,000 units purchased to get the ending inventory.

= 1,550 units × $56

= $86,800

Therefore, the cost of ending inventory, using the periodic FIFO method is $86,800