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Expert-verified Found in: Page 260 ### Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

# A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 350 units. Ending inventory at January 31 totals 150 units. UnitsUnit CostBeginning Inventory on Jan 1320$3.00Purchase on Jan 9803.20Purchase on Jan 251003.34Required Assume the perpetual inventory system is used and then determine the costs assigned to ending inventory when costs are assigned based on the FIFO method. (Round per unit costs and inventory amounts to cents.) Ending inventory totals$494.

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## Definition of FIFO

The method of allocating the cost of the inventory of the business under which cost incurred in acquiring the oldest inventory is allocated first to the cost of goods sold is known as FIFO.

## Calculation of Cost Assigned to Ending Inventory

 Particular Beginning Inventory/Purchases Cost of goods sold Ending Inventory Unit Per unit Cost Total Unit Per unit Cost Total Unit Per unit Cost Total Beginning Inventory 320 $3$960 320 $3$960 9 Jan 80 $3.20$256 320 $3$960 80 $3.20$256 25 Jan 100 $3.34$334 320 $3$960 80 $3.20$256 100 $3.34$334 26 Jan 320 $3$960 30 $3.20$96 50 $3.20$160 100 $3.34$334 ### Want to see more solutions like these? 