A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 440 units. Ending inventory at January 31 totals 170 units. Units Unit Cost Beginning inventory on January 1 400 $ 3.90 Purchase on January 9 90 4.10 Purchase on January 25 120 4.20 Required: Assume the perpetual inventory system is used and then determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

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Business

Tamara Hughes

10 December, 23:14

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 440 units. Ending inventory at January 31 totals 170 units. Units Unit Cost Beginning inventory on January 1 400 $ 3.90 Purchase on January 9 90 4.10 Purchase on January 25 120 4.20 Required: Assume the perpetual inventory system is used and then determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

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Maxwell · Answer 1

Inventory = $709

Explanation:

Giving the following information:

January 1 400 at $3.90

Purchase on January 9: 90 at $4.10

Purchase on January 25:120 at $4.20

On January 26, the company sells 440 units.

Ending inventory at January 31 totals 170 units.

FIFO (first-in, first-out)

Inventory = 120 * 4.20 + 50 * 4.10 = $709