The ending inventory assuming FIFO is:
A)$5,140.
B)$5,080.
C)$5,060.
D)$5,050.

Question

Quizplus · Accepted Answer

To calculate the ending inventory using FIFO method, we assume that the items that were purchased first are the ones that were sold first. Therefore, the cost of the remaining items in inventory is based on the cost of the last items purchased. In this case, the cost of the last 200 units purchased on December 29th at $25 per unit will be used to calculate the ending inventory.

Calculation: 
200 units x $25 per unit = $5,000 
Plus 
20 units x $7 per unit = $140 
Total = $5,140

The Ending Inventory Assuming FIFO Is