Question

Homestead Crafts, a distributor of handmade gifts, operates out of owner Emma Finn’s house. At the end of the current period, Emma reports she has 1,300 units (products) in her basement, 20 of which were damaged by water and cannot be sold. She also has another 350 units in her van, ready to deliver per a customer order, terms FOB destination, and another 80 units out on consignment to a friend who owns a retail store. How many units should Emma include in her company’s period-end inventory?

Units in Ending inventory:


Units of Product on hand: 1,300 units


Add:


Less:


Total units in period-end inventory 1,300 units

Answer 1

1,710 units

Step-by-step explanation:

Given that,

Units of product on hand = 1,300 units

Units in delivery van = 350 units

Units in consignment = 80 units

Units damaged by water and cannot be sold = 20 units

Total units in period-end inventory:

= Units of product on hand + Units in delivery van + Units in consignment - Units damaged

= 1,300 + 350 + 80 - 20

= 1,710 units

Therefore, 1,710 units should Emma include in her company’s period-end inventory.