Given the following data, calculate the cost of ending inventory using the FIFO costing method:
$\begin{array} { l l l }
1 / 1 & \text { Beginning inventory } & 45 \text { units at } \$ 10 \text { per unit } \
2 / 25 & \text { Purchases } & 40 \text { units at } \$ 12 \text { per unit } \
6 / 15 & \text { Purchases } & 30 \text { units at } \$ 13 \text { per unit } \
9 / 20 & \text { Purchases } & 25 \text { units at } \$ 14 \text { per unit } \
12 / 31 & \text { Ending inventory } & 40 \text { units }
\end{array}$

Question

Given the following data, calculate the cost of ending inventory using the FIFO costing method:
$\begin{array} { l l l } 
1 / 1 & \text { Beginning inventory } & 45 \text { units at } \$ 10 \text { per unit } \
2 / 25 & \text { Purchases } & 40 \text { units at } \$ 12 \text { per unit } \
6 / 15 & \text { Purchases } & 30 \text { units at } \$ 13 \text { per unit } \
9 / 20 & \text { Purchases } & 25 \text { units at } \$ 14 \text { per unit } \
12 / 31 & \text { Ending inventory } & 40 \text { units }
\end{array}$

Quizplus · Accepted Answer

Under the FIFO (First-In, First-Out) method, the oldest inventory costs are assigned to the cost of goods sold first, leaving the newest inventory costs for the ending inventory. The ending inventory of 40 units would consist of 25 units from the 9/20 purchase at $14 per unit and 15 units from the 6/15 purchase at $13 per unit. Thus, the calculation is (25 units * $14) + (15 units * $13) = $350 + $195 = $545.

Given the Following Data, Calculate the Cost of Ending Inventory