Nventory records for Marvin Company revealed the following: Date Transaction Number of Units Unit Cost Mar. 1 Beginning inventory 1,000 $7.20 Mar. 10 Purchase 600 7.25 Mar. 16 Purchase 800 7.30 Mar. 23 Purchase 600 7.35 Marvin sold 2,300 units of inventory during the month. Ending inventory assuming FIFO would be:

$5,140

Explanation:

The FIFO method of inventory valuation is one in which items purchase first are sold first. This is specially important for inventory with expiry dates or perishable inventory item.

Date              Transaction     Number of Units       Unit Cost

Mar. 1 Beginning inventory          1,000                  $7.20

Mar. 10 Purchase                             600                  $7.25

Mar. 16 Purchase                             800                  $7.30

Mar. 23 Purchase                             600                   $7.35

Total available                              3,000

Marvin sold 2,300 units. The sale would have included 1000 units from Mar 1, 600 units from Mar 10, 700 units from Mar 16

Balance = (100 * $7.30) + ($7.35 * 600)

= $730 + $4,410

= $5,140

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