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Use the information below to answer the following question. The following lots of a particular commodity were available for sale during the year: Beginning inventory 10 units at $60 First purchase 25 units at $65 Second purchase 30 units at $68 Third purchase 15 units at $75 The firm uses the periodic system, and there are 25 units of the commodity on hand at the end of the year. What is the amount of inventory at the end of the year using the FIFO method

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Answer:

Ending inventory value= $1,805

Explanation:

Giving the following information:

Beginning inventory 10 units at $60

First purchase 25 units at $65

Second purchase 30 units at $68

Third purchase 15 units at $75

Ending inventory in units= 25

To calculate the inventory value using the FIFO (first-in, first-out), we need to use the cost of the last units incorporated into inventory:

Ending inventory value= 15*75 + 10*68

Ending inventory value= $1,805