question archive The inventory records for Radford Co
The inventory records for Radford Co
Subject:FinancePrice:3.87 Bought7
The inventory records for Radford Co. reflected the following
|
Beginning inventory @ May 1 |
100 |
units @ |
$ 4.00 |
|
First purchase @ May 7 |
300 |
units @ |
$ 4.40 |
|
second purchase @ May 17 |
500 |
units @ |
$ 4.60 |
|
Third purchase @ May 23 |
100 |
units @ |
$ 4.80 |
|
Sales @ May 31 |
900 |
units @ |
$ 7.80 |
Determine the amount of ending inventory assuming the FIFO cost flow method.
A) $480
B) $440
C) $400
D) $940
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Answer:
A )
Step-by-Step explanation
According to the FIFO method of inventory management:
Cost of good sold shows 900 units. So Remaining inventory will be considered as closing.
The item purchased first will be sold first = 100 + 300 + 500 = 900 must be sold.
The remaining inventory will be 100 unit with a price$ 4.80 = $480.
The amount of ending inventory will be $480 respectively.
