FIFO and LIFO Costs Under Perpetual Inventory Systenm The fo

FIFO and LIFO Costs Under Perpetual Inventory Systenm The following units of an item were available for sale during the year: Beginning inventory Sale First purchase Sale Second purchase 29 units at $40 17 units at $64 27 units at $42 19 units at $64 17 units at $45 13 units at $64 The firm uses the perpetual inventory system, and there are 24 units of the item on hand at the end of the year. a. What is the total cost of the ending inventory according to FIFO? 315 X b. What is the total cost of the ending inventory according to LIFO? 996

Solution

Total Sales = 17 + 19 +13

= 49 Units

Cost of Ending Inventory using FIFO = 7 Units * $ 42 + 17 Units * $ 45

= $ 1,059

Hence, the correct answer is $ 1,059