Using the FIFO method of inventory pricing, what is the dollar value of ending inventory if there were 300 units on hand on December 31?
Annual inventory of windshield wipers
January 1 Beginning inventory 300 [email protected]
March 15 Purchase 150 [email protected]
June 10 Purchase 200 [email protected]
September 22 Purchase 175 units @10.00
December 10 Purchase 100 [email protected]
a)3188 b)3219 c)3350 d)3600
To calculate the dollar value of the ending inventory using the FIFO method, follow these steps:
1. Start with the earliest purchases and work your way to the most recent purchases in chronological order.
2. Multiply the quantity of each purchase by its respective cost per unit.
3. Add up the total dollar value of all the purchases made until you reach the ending inventory.
Let's calculate the ending inventory based on the given information:
Beginning Inventory (January 1):
300 units @ $11.00 = $3,300
Next, add the purchases made throughout the year:
March 15 Purchase:
150 units @ $10.50 = $1,575
June 10 Purchase:
200 units @ $10.75 = $2,150
September 22 Purchase:
175 units @ $10.00 = $1,750
December 10 Purchase:
100 units @ $12.00 = $1,200
To calculate the ending inventory, add up the dollar values of all the purchases:
$3,300 + $1,575 + $2,150 + $1,750 + $1,200 = $10,975
Therefore, the dollar value of the ending inventory, if there were 300 units on hand on December 31, is $10,975.