Automobile Audio has the following inventory data: $\begin{array}{rll}
\text { Nov. } 1 & \text { Inventory } & 30 \text { units } @ \$ 6.00 \text { each } \
8 & \text { Purchase } & 120 \text { units } @ \$ 6.45 \text { each } \
17 & \text { Purchase } & 60 \text { units } @ \$ 6.30 \text { each } \
25 & \text { Purchase } & 90 \text { units } @ \$ 6.60 \text { each }
\end{array}$ A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Ending inventory under FIFO is
A)$657
B)$1,269
C)$632
D)$1,295

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the first units purchased are the first units sold. Therefore, the ending inventory consists of the units purchased on November 25 (90 units at $6.60 each) and the remaining 10 units from the November 17 purchase (60 units at $6.30 each). The total ending inventory value under FIFO is: (90 units x $6.60) + (10 units x $6.30) = $657.

Automobile Audio Has the Following Inventory Data A Physical Count of Merchandise Inventory on November 30 Reveals