Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 350 units. Ending inventory at January 31 totals 150 units. Units Unit Cost Beginning inventory on January 1 320 $ 3.00 Purchase on January 9 80 3.20 Purchase on January 25 100 3.34 Required: Assume the periodic inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

Answer 1

Answer:

 494.00

Explanation:

The computation of the cost assigned to ending inventory using the FIFO method is shown below:

Particulars                         Units Unit Cost Amount

Purchase on January 9         50         3.20          160.00

Purchase on January 25 100          3.34          334.00

Cost of Ending Inventory  150.00                  494.00

Since there are 150 units in the ending inventory so we take 50 units at $3.20 and the rest 100 units at 3.34 so that the cost assigned to the ending inventory could come