required: assume the perpetual inventory system is used. determine the costs assigned to ending inventory…

required: assume the perpetual inventory system is used. determine the costs assigned to ending inventory when costs are assigned based on the fifo method.

required: assume the perpetual inventory system is used. determine the costs assigned to ending inventory when costs are assigned based on the fifo method.

Answer

Explanation:

Step1: Understand FIFO principle

FIFO (First - In, First - Out) assumes that the first goods purchased are the first ones sold.

Step2: Analyze inventory transactions

We start with an opening inventory of 250 units at $2.30 per unit. Then we have purchases on January 9 (60 units at $2.50 per unit) and January 25 (100 units at $2.64 per unit).

Step3: Calculate ending inventory

Since no sales are given for January 26 in the provided data, the ending inventory is the sum of the remaining units and their costs. The ending inventory consists of:

  • 250 units at $2.30 with a value of $250\times2.30 = 575$
  • 60 units at $2.50 with a value of $60\times2.50=150$
  • 100 units at $2.64 with a value of $100\times2.64 = 264$ The total value of the ending inventory is $575 + 150+264=989$.

Answer:

$989$