The following lots of a particular commodity were available for sale during the year: $\begin{array}{ll}
\text { Beginning invent ory } & 10 \text { units at } \$ 30 \
\text { First purchase } & 25 \text { units at } \$ 32 \
\text { Second purchase } & 30 \text { units at } \$ 34 \
\text { Third purchase } & 10 \text { units at } \$ 35
\end{array}$ The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year according to the FIFO method?
A) $655
B) $620
C) $690
D) $659

Question

Quizplus · Accepted Answer

Under FIFO, the ending inventory consists of the most recent purchases. Therefore, the 20 units on hand would be valued at 10 units from the third purchase at $35 each and 10 units from the second purchase at $34 each, totaling $690.

The Following Lots of a Particular Commodity Were Available for Sale