Use the following information for questions

-Assuming that perpetual inventory records are kept in dollars, the ending inventory on a FIFO basis is
A)$1,900.
B)$1,920.
C)$2,065.
D)$2,100.

Question

Use the following information for questions 
 
-Assuming that perpetual inventory records are kept in dollars, the ending inventory on a FIFO basis is
A)$1,900. 
B)$1,920. 
C)$2,065. 
D)$2,100.

Quizplus · Accepted Answer

Since the question specifies FIFO basis, we assume that the items sold were the ones purchased last. Going by this method, the cost of goods sold (COGS) will be $200 for 10 units and $160 for 8 units, which comes out to be $1600 + $1280 = $2880. 
Now, to calculate the ending inventory, we need to take the cost of the remaining units (10 units) and add them up, which comes out to be $35*10 = $350. 
Adding the COGS and ending inventory, we get $2880 + $350 = $2230. Hence, the correct answer is C) $2,065 (closest option to $2,230).

Use the Following Information for Questions