Use this information to answer the following question.
A periodic inventory system is used.
-Using the specific identification method and assuming that 50 of the items left are from the October 13 purchase and the rest are from the October 20 purchase,the cost assigned to ending inventory is
A)$3,840.
B)$3,312.
C)$3,372.
D)$3,176.

Question

Use this information to answer the following question.  
A periodic inventory system is used.
-Using the specific identification method and assuming that 50 of the items left are from the October 13 purchase and the rest are from the October 20 purchase,the cost assigned to ending inventory is
A)$3,840. 
B)$3,312. 
C)$3,372. 
D)$3,176.

Quizplus · Accepted Answer

Using the specific identification method, we assign the cost of goods sold and ending inventory to their actual cost. Since 50 items are from October 13 purchase (at $54 per unit) and the remaining are from October 20 purchase (at $56 per unit), we can calculate the cost of ending inventory as follows:

50 x $54 + 950 x $56 = $3,372

Therefore, the correct answer is (C) $3,372.

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