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7 March, 14:50

A firm that sells a single product had a beginning inventory of 4,000 units with a total cost of $28,000. Early in the year, 10,000 units were purchased at $9 each. Using FIFO, what is the value of the ending inventory of 3,000 units?

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  1. 7 March, 17:25
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    Ending inventory = $27,000

    Explanation:

    Giving the following information:

    A firm that sells a single product had a beginning inventory of 4,000 units with a total cost of $28,000. Early in the year, 10,000 units were purchased at $9 each.

    First, we need to calculate the unitary value of the beginning inventory:

    Beginning inventory = 28,000/4,000 = $7 per unit

    FIFO (first-in, first-out)

    The last units that are left have a value of $9 each.

    Ending inventory = 3,000*9 = $27,000
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