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General Accounting Discussions: FIFO METHOD - PERIODIC

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    • CommentAuthormattie
    • CommentTimeSep 6th 2007 edited
     
    I really don't understand this system. How do I get the "ENDING IVENTORY"?

    Here is the problem...

    If a company purchase merchadise in its first month and bought mechaside as follows:

    1. 150 units @ 6
    2. 200 units @ 7
    3. 100 units @ 8

    Assuning there are 180 units on hand. How do I compute the cost of inventory under the FIFO method?

    Please HELP!!!!!!
    Thankful People: ANEESH
    • CommentAuthorCounter
    • CommentTimeSep 6th 2007
     
    The first costs (oldest costs) come out of inventory first. That means the latest costs (most recent) costs remain in inventory. The latest cost of the 180 units in inventory is 100 units @$8 PLUS 80 units at $7 = $800 + $560 = $1,360.

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