Question

nventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 490 $ 2.44 Apr. 20 Purchase 320 2.73 Dunbar sold 630 units of inventory during the month. Ending inventory assuming FIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.)

Answer 1

Ending inventory assuming FIFO would be $169.4

Step-by-step explanation:

Under the FIFO system , inventories are priced using the price of the oldest batch in the stock, after which the price of the next oldest batch and this is done in turn. It is based on the principle that the first batch that arrives the store should be issued first.

The 630 units sold would be valued as follows:

$

490 × 2.44= 382.2

140 × 2.73 =1,195.6

630 1,577.8

The value of closing inventory = Value of opening inventory + Cost of purchases - cost of goods sold

= (490× $ 2.44) + ( 320 ×$2.73) - 1577.8 =$169.4

Ending inventory assuming FIFO would be $169.4