The inventory data for an item for November are:

-Using the first-in,first-out method,what is the cost of the merchandise inventory of 30 units on November 30?
A)$640
B)$605
C)$623
D)$660

Question

The inventory data for an item for November are:
 
-Using the first-in,first-out method,what is the cost of the merchandise inventory of 30 units on November 30?
A)$640 
B)$605 
C)$623 
D)$660

Quizplus · Accepted Answer

The first-in, first-out (FIFO) method assumes that the first units purchased are the first units sold. Therefore, the cost of the merchandise inventory of 30 units on November 30 is the cost of the first 30 units purchased. The first 20 units were purchased at a cost of $30 per unit, and the next 10 units were purchased at a cost of $32 per unit. Therefore, the cost of the merchandise inventory of 30 units on November 30 is 20 x $30 + 10 x $32 = $640.

The Inventory Data for an Item for November Are