Page 464 - Microsoft Word - 00 CIMA F1 Prelims STUDENT 2018.docx
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Chapter 25
Solution
FIFO method
Total purchases = 200 + 100 + 150 = 450 units
Sales = 250 units
Closing inventory = 450 – 250 = 200 units
FIFO method assumes the oldest inventory is sold first, therefore the units
remaining must be from the most recent purchases on day 4 (150 units) and
the balance from the day 2 purchases (50 units).
Cost:
50 × $18 = $900
150 × $20 = $3,000
––––––
$3,900
Total cost of closing inventory = $3,900
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