Answer:
The answers are:
A) Using FIFO, the inventory cost is $11,700
B) Using LIFO, the inventory cost is $7,500
C) Using ACV, the inventory cost is $9,435
Explanation:
<u>Date</u> <u>Units purchased</u> <u>Unit price</u> <u>Total purchase</u>
Jan. 1 2,500 units $5 per unit $12,500
Feb. 17 3,300 units $6 per unit $19,800
July 21 3,000 units $7 per unit $21,000
Nov. 23 1,200 units $8 per unit $9,600
TOTAL 10,000 units $62,900
At December 31, 1,500 units were left in the physical inventory
- Using FIFO, the inventory cost is $11,700 [= (1,200 units x $8 per unit) + (300 units x $7 per unit)]
- Using LIFO, the inventory cost is $7,500 (= 1,500 units x $5 per unit)
- Using ACV, the inventory cost is $9,435 [= ($62,900 / 10,000 units) x 1,500 units]
