Question

​Company's inventory records for its retail division show the following at ​31:

Beginning inventory Jan.1 90 units at $8 per unit
Jan.10 purchase 320 units at $11 per unit
Jan. 22 purchase 130 units at $12 per unit

At January 31, 190 units are still on hand. What is the cost of the ending inventory at January 31 if company uses the FIFO method?

a. $1,820
b. $2,220
c. $1,520
d. $1,440

Answer 1

b. $2,220

Step-by-step explanation:

Calculation for cost of the ending inventory

Ending inventory cost = (130*12) + (190-130)*11

Ending inventory cost =1,560+(60*11)

Ending inventory cost =1,560+660

Ending inventory cost = $2,220

Therefore cost of the ending inventory will be $2,220