Question

INVENTORY METHODS: Co. F has the following units of beginning inventory and purchases for the year: beginning inventory 100 units at $40 each, a 2/28 Purchase 200 units at $50 each and a 6/15 purchase of 200 units at $60 each and a 12/15 purchase of 100 units at $80 each. Using the FIFO method, if the ending inventory is 400 units, what is the cost of the ending inventory

Answer 1

Answer: Cost of closing inventory =$25,000

Step-by-step explanation:

Using the FIFO which is the First In First Out method, The inventorY purchased first be sold first with the the ending inventory consisting of the most recent purchases.

Given nthta ending inventory is 400 units, we start fro the most recent purchase

12/15 purchase of 100 units at $80 each=$8,000

6/15 purchase of 200 units at $60 each=$12,000

we are left with 100 units so

2/28 Purchase 100 units at $50 each =$5000

Cost of closing inventory =$8,000+$12,000+$5000= $25,000

Therefore cost of 400 units using the FIFO Method is $25,000.