addison, inc. uses a perpetual inventory system. below is information about one inventory item for the month…

addison, inc. uses a perpetual inventory system. below is information about one inventory item for the month of september. use this information to answer the questions that follow.\nsep. 1 inventory 20 units at $20\n4 sold 10 units\n10 purchased 30 units at $25\n17 sold 20 units\n30 purchased 10 units at $30\nif addison uses fifo, the cost of the ending inventory on september 30 is\n800\n650\n750\n700

addison, inc. uses a perpetual inventory system. below is information about one inventory item for the month of september. use this information to answer the questions that follow.\nsep. 1 inventory 20 units at $20\n4 sold 10 units\n10 purchased 30 units at $25\n17 sold 20 units\n30 purchased 10 units at $30\nif addison uses fifo, the cost of the ending inventory on september 30 is\n800\n650\n750\n700

Answer

Explanation:

Step1: Calculate units available for sale

Total units available = 20 (Sep 1) + 30 (Sep 10) + 10 (Sep 30)=60 units

Step2: Calculate units sold

Total units sold = 10 (Sep 4)+20 (Sep 17)=30 units

Step3: Calculate ending - inventory units

Ending - inventory units = 60 - 30 = 30 units

Step4: Apply FIFO

Under FIFO, the ending - inventory consists of the most recently purchased units. 10 units from the Sep 30 purchase at $30 each and 20 units from the Sep 10 purchase at $25 each. Cost of ending inventory=(10×$30)+(20×$25) = $300 + $500 = $800

Answer:

$800$