Sanfillipo, Inc., had 800 units of inventory on hand at March 1 of the current year, costing $20 each. Purchases and

Question

Sanfillipo, Inc., had 800 units of inventory on hand at March 1 of the current year, costing $20 each. Purchases and sales of inventory during the month of March were as follows: Date Purchases Sales March 8 600 units March 15 400 units @ $22 each March 22 400 units @ $24 each March 27 400 units Sanfillipo uses the periodic inventory system. According to a physical count, 600 units were on hand at the end of March. The cost of inventory at the end of March applying the FIFO method is:

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Computation of Cost of Inventory at the End of March applying the FIFO method: = 400 units * $24 + 200 units * $22 = $9,600 + $4,400 = $14,000 Note: According to FIFO Method, Units purchased first will be sold out first. So, 600 units on March 8 will be sold out from beginning inventory (800 units). Then we have 200 + 400 + 400 units remaining. On march 27, 400 units sold out from March 1 st and March 15 inventory (200 + 200). So, we have 200 units on March 15 and 400 units on 400 units remaining.

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