Question:
If Thomas uses a first-in, first-out perpetual inventory system, the total cost of the inventory for
carburetor
2642J at March 31 is
a. $196,115
b. $197,488
c. $201,300
d. $263,825
Answer:
c. The company began March with 3,200 units in inventory at $64.30 each. The March 4 purchase
added 3,400 additional units at $64.75 each. Under FIFO, the 3,600 units sold on March 14
were the oldest units. That sale eliminated all of the 3,200 units priced at $64.30 and 400 of
the units priced at $64.75, leaving an inventory of 3,000 units at $64.75 prior to the March 25
purchase. On March 25, 3,500 units were acquired at $66. The 3,450 units sold on March 28
were the 3,000 remaining units priced at $64.75 and 450 units priced at $66. The ending
inventory consists of 3,050 units at $66 each, or $201,300. The answer would have been the
same under the periodic FIFO method.
If Thomas uses a first-in, first-out perpetual inventory system, the total cost of the inventory for
carburetor
2642J at March 31 is
a. $196,115
b. $197,488
c. $201,300
d. $263,825
Answer:
c. The company began March with 3,200 units in inventory at $64.30 each. The March 4 purchase
added 3,400 additional units at $64.75 each. Under FIFO, the 3,600 units sold on March 14
were the oldest units. That sale eliminated all of the 3,200 units priced at $64.30 and 400 of
the units priced at $64.75, leaving an inventory of 3,000 units at $64.75 prior to the March 25
purchase. On March 25, 3,500 units were acquired at $66. The 3,450 units sold on March 28
were the 3,000 remaining units priced at $64.75 and 450 units priced at $66. The ending
inventory consists of 3,050 units at $66 each, or $201,300. The answer would have been the
same under the periodic FIFO method.
