Question

Bramble has the following inventory data: Nov. 1 8 17 25 Inventory Purchase Purchase Purchase 29 units @ $5.90 each 118 units @ $6.30 each 59 units @ $6.15 each 88 units @ $6.50 each A physical count of merchandise inventory on November 30 reveals that there are 98 units on hand. Ending inventory under FIFO is $1244 $634 $606 $1216.

Answer 1

Under FIFO Method, unit purchase first, sold first. In other words, If we puchase units on November 1 and November 15 then units which purchased on November 1, sold first. Ending inventory under FIFO method are those units which are purchased at the end.

Ending inventory under FIFO method = (88 units * $6.50) + (10* units * $6.15)

= $572 + $61.50

= $633.50

$634 Is the value of ending inventory.

Working notes

* 10 units = 98 units - 88 units