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A company has inventory of 20 units at a cost of $20 each on June 1. On June 3, they purchased 30 units at $22 each. 22 units are sold on June 5. Using the FIFO periodic inventory method, what is the cost 28 units remaining in ending Inventory after the June 5 sale?

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Answer:

Ending inventory= $616

Explanation:

Giving the following information:

Beginning inventory= 20 for $20 each.

June 3: purchased 30 units at $22 each.

June 5: sold 22 units

Using the FIFO periodic inventory method.

We need to determine the cost of the 28 units in ending inventory.

Under the FIFO ( firs-in, first-out) inventory method, the cost of ending inventory is calculated using the price of the last units incorporated.

Ending inventory= 28*22= $616

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