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A company has beginning inventory of 44 units at a cost of $12.00 each on October 1. On October 5, it purchases 28 units at $13.00 per unit. On October 12 it purchases 38 units at $14.00 per unit. On October 15, it sells 84 units. Using the periodic FIFO inventory method, what is the value of the inventory at October 15 after the sale?

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Answer:

The answer is: $364

Explanation:

The inventory records are as follows:

  • Oct 1   beginning inventory: 44 units at $12 per unit
  • Oct 5  purchased merchandise: 28 units at $13 per unit
  • Oct 12 purchased merchandise: 38 units at $14 per unit
  • Oct 15 sold merchandise: 84 units sold

Using the first in, first out periodic inventory method, the merchandise inventory at Oct 15 is: 26 units at $14 per unit = $364.

The COGS is (44 x $12) + (28 x $13) + (12 x $14) = $1,060

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