A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 350 units. Ending inventory at January 31 totals 150 units.
|Beginning inventory on January 1||320||$3.00|
|Purchase on January 9||80||3.20|
|Purchase on January 25||100||3.34|
Assume the periodic inventory system is used.
Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.
Under the first-in-first-out (FIFO) method, goods which are manufactured or purchased earliest will be sold first by the company. This method is typically used when goods manufactured or sold are of a perishable nature.
Answer and Explanation: 1
|Date||Goods purchased||Cost of goods sold||Inventory balance|
|No. of units||Cost per unit||No. of units sold (A)...|
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fromChapter 6 / Lesson 3
The FIFO inventory method stands for First in First Out, where costs accrued first will be paid out before those acquired later. Learn how to identify equivalent units using this method, and how to develop a production cost report as well.