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Homework answers / question archive / A company had the following purchases during the current year: January: 10 units at $120 February: 20 units at $130 May: 15 units at $140 September: 12 units at $150 November: 10 units at $160 On December 31, there were 26 units remaining in ending inventory
A company had the following purchases during the current year:
January: 10 units at $120
February: 20 units at $130 May: 15 units at $140 September: 12 units at $150 November: 10 units at $160
On December 31, there were 26 units remaining in ending inventory. These 26 units consisted of 2 from January 4 from February 6 from May, 4 from September, and 10 from November. Using the specific identification method, what is the cost of the ending inventory?
a. $3,500
b. $3,800
c. $3,960
d. $3,280
e. $3,640
Answer: b .
Correct option is "B".
Explanation:
Cost of ending inventory = (2 units from January * $120) + (4 units from February * $130) + (6 units from May * $140) + (4 units from september * $150) + (10 units from November * $160)
= (2 * $120) + (4 * $130) + (6 * $140) + (4 * $150) + (10 * $160)
= $240 + $520 + $840 + $600 + $1,600
= $3,800.
