Tomasino's inventory records show the following data at January 31: At January 31,210 units are still on hand.What is the cost of the ending inventory at January 31 if Tomasino uses the FIFO method?

Question

Tomasino's inventory records show the following data at January 31:  At January 31,210 units are still on hand.What is the cost of the ending inventory at January 31 if Tomasino uses the FIFO method?

Quizplus · Accepted Answer

FIFO (first-in, first-out) assumes that the first items purchased are the first ones sold. Therefore, to determine the cost of the ending inventory, we need to start with the earliest purchase and keep adding purchases until we reach the current inventory level of 210 units:

- 60 units were purchased at $10 per unit = $600
- 150 units were purchased at $12 per unit = $1,800

The cost of the ending inventory at January 31 using the FIFO method is the cost of the last 210 units purchased, which is $12 per unit. Therefore:

Cost of ending inventory = 210 units x $12 per unit = $2,520

The correct answer is C) $2,210, but there seems to be a mistake in the question or in the inventory records provided, as the given data does not match the calculations.

Tomasino's Inventory Records Show the Following Data at January 31