A business purchases stock on three separate occasions $$\begin{array} { r r }
\text { Units } & \text { Total } \
\text { bought } & \text { Cost } € \
3500 & 8050 \
3000 & 7110 \
4000 & 9600 \
\hline 10500 & 24760
\end{array}$$
-Using the first in-first out (FIFO) method, the value of inventory is:

Question

A business purchases stock on three separate occasions $$\begin{array} { r r } 
\text { Units } & \text { Total } \
\text { bought } & \text { Cost } € \
3500 & 8050 \
3000 & 7110 \
4000 & 9600 \
\hline 10500 & 24760
\end{array}$$
-Using the first in-first out (FIFO) method, the value of inventory is:

Quizplus · Accepted Answer

Under the FIFO method, the first items purchased are the first ones to leave the inventory, so the remaining inventory is valued at the most recent purchase prices. The business bought a total of 10,500 units and sold some of them. To find the value of the remaining inventory, we start from the most recent purchase and work backwards until we reach the total units remaining. The total cost of purchases is €24,760, but we need to calculate the value of the remaining inventory, not the cost of goods sold. Assuming all 10,500 units were not sold, we calculate the value of the remaining inventory based on the last purchases. Without knowing the exact number of units sold, we cannot directly calculate the remaining inventory value. However, the principle of FIFO suggests that the remaining inventory would be valued based on the most recent purchase prices. Since the specific number of units sold is not provided, a direct calculation cannot be made from the information given. The correct answer, therefore, involves understanding that FIFO values inventory at the most recent costs, but without details on the units sold, a specific numerical answer cannot be accurately determined from the provided options without making assumptions on the number of units remaining.

A Business Purchases Stock on Three Separate Occasions -Using the First In-First Out (FIFO) Method, the Value of r