The following data is available for an item of JNC Inc.for the month of March: $$\begin{array} { r l l }
\text { March } 1 & \text { Inventory } & 15 \text { units at } \$ 10 \text { each } \
15 & \text { Purchase } & 30 \text { units at } \$ 18 \text { each } \
31 & \text { Purchase } & 24 \text { units at } \$ 15 \text { each } \
& \text { Sale } & 30 \text { units }
\end{array}$$ ? ?Using the first-in, first-out method, what is JNC Inc.'s cost of ending inventory for March??
A) $630
B) $510
C) $420
D) $360

Question

The following data is available for an item of JNC Inc.for the month of March: $$\begin{array} { r l l } 
\text { March } 1 & \text { Inventory } & 15 \text { units at } \$ 10 \text { each } \
15 & \text { Purchase } & 30 \text { units at } \$ 18 \text { each } \
31 & \text { Purchase } & 24 \text { units at } \$ 15 \text { each } \
& \text { Sale } & 30 \text { units }
\end{array}$$ ? ?Using the first-in, first-out method, what is JNC Inc.'s cost of ending inventory for March??
A) $630
B) $510
C) $420
D) $360

Quizplus · Accepted Answer

Under the first-in, first-out (FIFO) method, the earliest purchased items are sold first. Therefore, the ending inventory consists of the most recently purchased items. The sales of 30 units would first deplete the initial 15 units at $10 each and then 15 units from the next purchase of 30 units at $18 each. The ending inventory would thus include the remaining 15 units at $18 each and all 24 units at $15 each. The calculation is as follows: (15 units * $18) + (24 units * $15) = $270 + $360 = $630.

The Following Data Is Available for an Item of JNC