Question

Concord uses the periodic inventory system. For the current month, the beginning inventory consisted of 7400 units that cost $10.00 each. During the month, the company made two purchases: 3000 units at $11.00 each and 11900 units at $11.50 each. Concord also sold 12800 units during the month. Using the FIFO method, what is the ending inventory

Answer 1

Answer:

$109,250

Explanation:

FIFO assumes that the units to arrive first, will be sold first. Therefore, inventory valuation is based on later or recent prices.

Step 1 : units in ending inventory

Ending Inventory =  units available for sale - units sold

                             =  9,500

Step 2 : inventory value

Ending Inventory = 9,500 x $11.50 = $109,250