FIFO and LIFO costs under perpetual inventory system The following units of an item were available for sale during the year: Beginning inventory 48 units at $45 Sale 43 units at $63 First purchase 34 units at $48 Sale 23 units at $63 Second purchase 30 units at $51 Sale 28 units at $65 The firm uses the perpetual inventory system, and there are 18 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? $ b. What is the total cost of the ending inventory according to LIFO?
FIFO and LIFO costs under perpetual inventory system The following units of an item were available for sale during the year: Beginning inventory 48 units at $45 Sale 43 units at $63 First purchase 34 units at $48 Sale 23 units at $63 Second purchase 30 units at $51 Sale 28 units at $65 The firm uses the perpetual inventory system, and there are 18 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? $ b. What is the total cost of the ending inventory according to LIFO?
Chapter1: Financial Statements And Business Decisions
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A and b please
Transcribed Image Text:FIFO and LIFO costs under perpetual inventory system
The following units of an item were available for sale during the year:
Beginning inventory
48 units at $45
Sale
43 units at $63
First purchase
34 units at $48
Sale
23 units at $63
30 units at $51
28 units at $65
Second purchase
Sale
The firm uses the perpetual inventory system, and there are 18 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?
b. What is the total cost of the ending inventory according to LIFO?
Expert Solution
Step 1
A perpetual inventory system means inventory is valued continuously that is after every transaction.
FIFO stands for First In, First Out which means goods purchased first are to be sold first.
LIFO stands for Last In, First Out which means goods purchased last are to be sold first.
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