The following information relates to inventory for Shoeless Joe Inc. At what amount would Shoeless report ending inventory using FIFO cost flow assumptions?

Question

The following information relates to inventory for Shoeless Joe Inc.  At what amount would Shoeless report ending inventory using FIFO cost flow assumptions?

Quizplus · Accepted Answer

FIFO method assumes that the first units purchased are sold first, therefore the ending inventory consists of the most recently purchased units. According to the data, the most recent units were purchased at a cost of $10 per unit. Multiplying this cost by the remaining 11 units in inventory gives us an ending inventory value of $110 using FIFO cost flow assumption.

The Following Information Relates to Inventory for Shoeless Joe Inc