Practice Questions, Question 17 Teal Corporation uses the periodic inventory sys

Question

Practice Questions, Question 17 Teal Corporation uses the periodic inventory system to record its inventory. The following information was available for the month of November: Date Nov. I Nov. 8 Nov. 15 Nov. 22 Explanation Beginning inventory 6 S30 Purchase Purchase Purchase Units Unit Cost Total Cost 10 15 16 3 S 180 320 525 576 32 35 Total A total of 25 units were sold during the period Assuming the use of the first-in, first-out (FIFO) cost formula, what is the cost of the ending inventory $786 $815 $852 $710

Explanation / Answer

Under FIFO method, cost of goods sold will consider based on First in First out. so ending inventory balance will be last few purchases only.

So answer is $786

Units rate Amount Balance from Nov 15 purchase 6 $ 35 $      210 Balance from Nov 22 purchase 16 $ 36 $      576 Ending inventory under FIFO 22 $      786

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