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Harding Systems,Inc.uses a periodic inventory system.The purchases of a particular product during the year are shown below:
At December 31 the ending inventory consisted of 1,500 units.
-Compute the cost of the ending inventory based on the FIFO method of inventory valuation.
A)$12,500
B)$29,175
C)$10,975
D)$27,650

Question

[The following information applies to the questions displayed below.]
Harding Systems,Inc.uses a periodic inventory system.The purchases of a particular product during the year are shown below:
  At December 31 the ending inventory consisted of 1,500 units.
-Compute the cost of the ending inventory based on the FIFO method of inventory valuation.
A)$12,500 
B)$29,175 
C)$10,975 
D)$27,650

Quizplus · Accepted Answer

FIFO (First-In, First-Out) method assumes that the first items purchased are the first items sold. Therefore, the ending inventory consists of the most recent purchases. In this case, the ending inventory consists of 500 units purchased at $25 per unit, resulting in a cost of $12,500.

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