Julian Junkets has the following inventory information. Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis?
A) $2,748
B) $2,754
C) $2,778
D) $5,796

Question

Julian Junkets has the following inventory information.  Assuming that a perpetual inventory system is used, what is the ending inventory on a FIFO basis?
A) $2,748 
B) $2,754 
C) $2,778 
D) $5,796

Quizplus · Accepted Answer

To calculate the ending inventory on a FIFO basis, we assume that the first items purchased are sold first. Therefore, the cost of the ending inventory is based on the cost of the most recently purchased items. Using the FIFO method, we take 3 units from the March 12 purchase at $912, and 2 units from the April 26 purchase at $924, for a total ending inventory cost of $2,754.

Julian Junkets Has the Following Inventory Information