Use this information to answer the following question. A periodic inventory system is used.
Using FIFO,the cost assigned to ending inventory is
A)$8,112.
B)$2,664.
C)$3,480.
D)$8,928.

Question

Use this information to answer the following question.  A periodic inventory system is used.
Using FIFO,the cost assigned to ending inventory is
A)$8,112. 
B)$2,664. 
C)$3,480. 
D)$8,928.

Quizplus · Accepted Answer

Since a periodic inventory system is used and the cost flow assumption is FIFO, the cost assigned to ending inventory would be the cost of the last units purchased. Based on the information given in the question, the cost of the last 400 units purchased (10 units at $16 and 390 units at $8) would be $3,480 (10 x $16 + 390 x $8), so the correct answer is choice C.

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