Use the information above to answer the following question.If the company uses the FIFO costing method,what is the cost of its ending inventory?
A)$1,494.
B)$2,290.
C)$2,580.
D)$2,706.

Question

Quizplus · Accepted Answer

FIFO (first-in, first-out) costing method assumes that the first units purchased are the first units sold. Therefore, the ending inventory consists of the most recently purchased units. The cost of the ending inventory is calculated by multiplying the number of units in ending inventory by the cost of the most recent purchase. In this case, the company has 300 units in ending inventory, and the most recent purchase was at a cost of $4.98 per unit. Therefore, the cost of the ending inventory is 300 * $4.98 = $1,494.

Use the Information Above to Answer the Following Question