Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 310 units. Ending inventory at January 31 totals 130 units. Units Unit Cost Beginning inventory on January 1 280 $ 2.60 Purchase on January 9 60 2.80 Purchase on January 25 100 2.94 Required: Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

Answer 1

Costs assigned to ending inventory:
From January 25 purchase	294	=100*2.94
From January 9 purchase	84	=(130-100)*2.80
Costs assigned to ending inventory	378