Use this information to answer the following question. $ \begin{array}{rlrl}
\text { Feb. }&1 & \text { Inventory } & 200 \text { units @ } \$ 6.00 \
&6 & \text { Purchase } & 300 \text { units @ } \$ 6.60 \
&13 & \text { Purchase } & 100 \text { units @ } \$ 7.20 \
&20 & \text { Purchase } & 200 \text { units @ } \$ 7.80 \
&25 & \text { Purchase } & 40 \text { units @ } \$ 8.40 \
&& \text { Total sales } & 620 \text { units }
\end{array}$

A periodic inventory system is used.
Using the specific identification method and assuming that 50 of the items left are from the February 13 purchase and the rest are from the February 20 purchase,the cost assigned to ending inventory is

Question

Use this information to answer the following question. $ \begin{array}{rlrl}
\text { Feb. }&1 & \text { Inventory } & 200 \text { units @ } \$ 6.00 \
&6 & \text { Purchase } & 300 \text { units @ } \$ 6.60 \
&13 & \text { Purchase } & 100 \text { units @ } \$ 7.20 \
&20 & \text { Purchase } & 200 \text { units @ } \$ 7.80 \
&25 & \text { Purchase } & 40 \text { units @ } \$ 8.40 \
&& \text { Total sales } & 620 \text { units }
\end{array}$

A periodic inventory system is used.
Using the specific identification method and assuming that 50 of the items left are from the February 13 purchase and the rest are from the February 20 purchase,the cost assigned to ending inventory is

Quizplus · Accepted Answer

The cost assigned to ending inventory is calculated as follows:
Cost of goods available for sale = $2,960 ($1,520 + $1,440)
Number of items available for sale = 120 (70 + 50)
Cost per item = $2,960 / 120 = $24.67
Ending inventory = 70 – 50 = 20
Cost of ending inventory = 20 × $24.67 = $493.40 (items from February 20 purchase)
Total cost of ending inventory = $493.40 + (30 × $25.20) = $1,686. Therefore, the best choice is C.

Use This Information to Answer the Following Question A Periodic Inventory System Is Used