Question

On December 31, there were 46 units remaining in ending inventory. These 46 units consisted of 6 from January, 8 from February, 10 from May, 8 from September, and 14 from November. Using the specific identification method, what is the cost of the ending inventory?

Answer 1

Answer:

$6,734

Explanation:

On December 31, there were 46 units remaining in ending inventory.

These 46 units consisted of

6 from January x $123 = 738

8 from February x $133 = 1064

10 from May x $143 = 1430

8 from September x $153 = 1224

14 from November x $163 = 2282

Using the specific identification method, the cost of the ending inventory is: 734 + 1064 + 1430 + 1224 + 2282 = $6734

Answer 2

Answer:

$6,738

Explanation:

When a company uses the specific identification method to value inventory they must identify each item individually and assign them their purchase cost.

The inventory consists of:

• 6 units from January = 6 x $123 = $738
• 8 units from February = 8 x $133 = $1,064
• 10 units from May = 10 x $143 = $1,430
• 8 units from September = 8 x $153 = $1,224  
• 14 units from November = 14 x $163 = $2,282

total inventory $6,738