Question

Inventory records for Marvin Company revealed the following:
Date Transaction Number of Units Unit Cost
Mar. 1 Beginning inventory 1,090 $ 7.25
Mar. 10 Purchase 510 7.75
Mar. 16 Purchase 397 8.35
Mar. 23 Purchase 510 9.05
Marvin sold 1,880 units of inventory during the month. Ending inventory assuming FIFO would be ____________.

Answer 1

Answer:

Ending inventory= $5,592.45

Explanation:

Giving the following information:

Mar. 1: Beginning inventory= 1,090 units at $7.25

Mar. 10: Purchase: 510 units at $7.75

Mar. 16: Purchase: 397 units at $8.35

Mar. 23: Purchase: 510 units at $9.05

First, we need to calculate the number of units in ending inventory:

Ending inventory in units= total units - units sold

Ending inventory in units= 2,507 - 1,880= 627

Under FIFO (first-in, first-out), the ending inventory is composed of the cost of the last units bought.

Ending inventory= 510*9.05 + 117*8.35= $5,592.45