A firm purchased 50 units of materials with a unit price of $1.30 on June 1. On June 15, the firm purchased 50 units with a unit price of $1.20. If the firm uses the FIFO method of inventory pricing, the total cost of 65 units issued on June 20 would be

Question

Quizplus · Accepted Answer

Under the FIFO method, the first 50 units are issued at $1.30 each, and the remaining 15 units are issued at $1.20 each. Therefore, the total cost is (50 x $1.30) + (15 x $1.20) = $83.00.

A Firm Purchased 50 Units of Materials with a Unit