Question

Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 470 $ 2.37 Apr. 20 Purchase 410 2.72 Dunbar sold 580 units of inventory during the month. Ending inventory assuming FIFO would be:

Answer 1

Using the FIFO method, Dunbar Incorporated's ending inventory would be 300 units remaining at $2.72 each, totaling $816.

Step-by-step explanation:

The question concerns the calculation of ending inventory using the First-In, First-Out (FIFO) inventory costing method. In FIFO, the cost of the oldest inventory (first-in) is the cost used up first when the inventory is sold (first-out). To determine ending inventory, we must calculate which items remain after sales have been accounted for.

Dunbar Incorporated sold 580 units, and they had a beginning inventory of 470 units at $2.37 each and an additional purchase of 410 units at $2.72 each. Using FIFO, the 470 units sold would come from the beginning inventory, leaving all 410 units purchased on April 20 still in stock. Since they sold a total of 580 units, this means they sold an additional 110 units (580-470) from the April 20 purchase. We subtract this from the 410 units to find the ending inventory, which is:

410 units - 110 units = 300 units remaining.

Therefore, the ending inventory for Dunbar Incorporated, assuming FIFO, is 300 units at the cost of $2.72 per unit.

Answer 2

Ending inventory= $816

Step-by-step explanation:

Giving the following information:

Apr. 1 Beginning inventory 470 $2.37

Apr. 20 Purchase 410 $2.72

Dunbar sold 580 units of inventory during the month.

To calculate the ending inventory under the FIFO (first-in, first-out) method, we need to use the cost of the last units incorporated into inventory.

Units in ending inventory= 880 - 580= 300

Ending inventory= 300*2.72= $816