Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 250 units. Ending inventory at January 31 totals 130 units.

	Units	Unit Cost
Beginning inventory on January 1	230	$	2.00
Purchase on January 9	50		2.20
Purchase on January 25	100		2.34

Required:
Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on the FIFO method.

Perpetual FIFO:

Answer 1

Answer: Ending Inventory $300

Goods Purchsed Units Cost per un Total Cost Units Date Jan-01 Jan-09 460 50 @ 2.20 110 460 Perpetual FIFO Cost of Goods sold Cost per unit Cost of goods sold Units 230 230 50 230 50 100 @ 2.00 460 30 @ 2.20 44100 504 130 Jan-25 100 @ 2.34 234 Ending Inventory Balance Cost per unit Inventory Balance @ 2.00 @ 2.00 @ 2.20 110 2.00 460 @ 2.20 @ 2.34 @ 2.20 @ 2.34 234 300 110 234 Jan-26 230 20 Total 250