Question

A company had beginning inventory of 200 units costing $5.00 each. During the year they made the following purchases: April 20, 300 units at $6.00 each; June 14, 250 units at $7.00 each; August 12, 200 units at $8.00 each; and November 15, 50 units at $9.00 each. There were 260 units remaining in inventory at the end of the year. What was the value of the ending inventory, assuming FIFO? $2,120.00 $2,210.00 $1,630.00 $1,360.00

Answer 1

$2120.00

Explanation:

Answer 2

$2120 (closing inventory)

Explanation:

FIFO is first in first out method of stock keeping. So basically here you have the closing inventory of 260 units. So you can take:

50 * 9 = 450

200 * 8 = 1600 (since its FIFO so you sell that stock first which you purchased first after which you are

10 * 7 = 70 left with this - adds up to 260 units )

50 + 200 + 10 = 260 units

$450 + $1600 + $70 = $2120 (closing inventory)