Ask Question
24 March, 17:55

The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the FIFO method?

a. $655

b. $620

c. $690

d. $659

+1
Answers (1)
  1. 24 March, 20:43
    0
    c. $690

    Explanation:

    In FIFO method, A company can sell those products which it has purchased earlier.

    Beginning Inventory = 10 units x $30 = $ 300

    First Purchase = 25 units x $32 = $ 800

    Second purchase = 30 units x $34 = $1,020

    Third purchase = 10 units x $35 = $ 350

    Total costs (75 units) = $2,470

    As the firm uses FIFO inventory method, it has 20 inventory in hands,

    Therefore, 10 units from the last purchase (third) and 10 units from second purchase will be remained unsold.

    Hence, Ending inventory cost =

    Second purchase 10 units x $34 = $340

    Third purchase 10 units x $35 = $350

    Total ending inventory cost = $690
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers