Buffalo Company uses a periodic inventory system. For April, when the company sold 450 units, the...
Question:
Buffalo Company uses a periodic inventory system. For April, when the company sold 450 units, the following information is available.
| Units | Unit Cost | Total Cost | |
|---|---|---|---|
| April 1 inventory | 230 | $12 | $2,760 |
| April 15 purchase | 430 | 14 | 6,020 |
| April 23 purchase | 340 | 16 | 5,440 |
| 1,000 | $14,220 |
Compute the April 30 inventory and the April cost of goods sold using the FIFO method.
FIFO & the Periodic Inventory System:
When the periodic inventory system is used, the ending inventory is computed at the end of each accounting period using the physical units on hand and the inventory valuation method selected.
Answer and Explanation: 1
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FIFO will assume the sales comes from the oldest units, so the ending inventory will be valued at the cost of $16 & $14 per unit from the lat...
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Periodic Inventory System: Definition, Advantages & Examples
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