Answer:
Opening inventory = 1,450 x $34 = 49,300
Purchases = 890 x $55 = 48,950
Purchases = <u>650 </u> x $45 = <u>29,250</u>
Total 2,990 127,500
Less:
Sales 350 @ $34 11,900
Sales 1,100 @ $34 37,400
Sales <u> 520</u> @ $55 <u>28,600</u>
Closing inventory <u>1,020 </u>units <u>49,600</u>
Cost of ending inventory = $49,600
Explanation:
In FIFO method, socks are issued out on first come, first served basis. The 350 units that were first issued will be valued at $34 per unit, the next 1,100 units will also be valued at $34. These two issues were taken from the opening inventory and are expected to be valued at the cost of opening inventory. the next 520 units sold will be valued at $55. This issue was made from 890 units purchased after the opening inventory.