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A company had the following purchases during the current year:
Jan: 10 units at $ 120

Feb: 20 units at $130

May: 15 units at $140

Sep: 12 units at $150

Nov: 10 units at $160

On December 31, there were 29 units remaining in ending inventory. These 29 units consisted of 1 from March, 6 from April, 5 from June, 9 from October, and 8 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.

Respuesta :

Answer:

b. $3,800.00

Explanation:

The computation of  cost of the ending inventory is given below:-

Month   Units      Price           Amount

Jan         2.00      $120.00     $240.00

Feb        4.00      $130.00   $520.00

May        6.00      $140.00   $840.00

Sept 4.00      $150.00     $600.00

Nov         10.00 $ 160.00   $1,600.00

Ending Inventory                    $3,800.00

So, for computing the cost of ending inventory we simply multiply units with amount of every Month.

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