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The following units of an inventory item were available for sale during the year:

Beginning inventory 10 units at $55
First purchase 25 units at $60
Second purchase 30 units at $65
Third purchase 15 units at $70

The firm uses the periodic inventory system. During the year, 60 units of the item were sold.The value of ending inventory using FIFO is:

A. $1,250
B. $1,350
C. $1,375
D. $1,150

Respuesta :

Answer:

$1,375

Explanation:

The computation of the value of ending inventory using FIFO is shown below:

But before that first we have to compute the ending inventory units

= Total purchase units - sales units

= 80 units - 60 units

= 20 units

The total purchase units is

= 10 units + 25 units + 30 units + 15 units

= 80 units

So the ending inventory is

= 15 units × $70 + 5 units × $65

= $1,050 + $325

= $1,375

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