The units of an item available for sale during the year were as follows:

Date	Line Item Description	Units	Cost per Unit	Amount
Jan. 1	Inventory	20 units	at $45	$900
Aug. 13	Purchase	12 units	at $48	576
Nov. 30	Purchase	7 units	at $50	350
 	Available for sale	39 units	 	$1,826
There are 23 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using the (a) first-in, first-out (FIFO) method;

To calculate the inventory cost using the **first-in, first-out (FIFO) method**, we assume that the earliest purchases (inventory) are sold first. Therefore, the remaining inventory consists of the most recent purchases.

### Step-by-step FIFO calculation:

1. **Available inventory breakdown**:
   - **Beginning inventory (Jan. 1)**: 20 units at $45 = $900
   - **First purchase (Aug. 13)**: 12 units at $48 = $576
   - **Second purchase (Nov. 30)**: 7 units at $50 = $350
   - **Total units available**: 20 + 12 + 7 = 39 units

2. **Physical inventory on Dec. 31**: 23 units are still in stock.

3. **Inventory under FIFO method**: Since FIFO assumes the oldest units are sold first, the 23 units remaining would be from the most recent purchases (starting from the latest purchase).

### FIFO Inventory Cost:

- **7 units** from the Nov. 30 purchase, at $50 = 7 × $50 = **$350**
- **12 units** from the Aug. 13 purchase, at $48 = 12 × $48 = **$576**
- **4 units** from the Jan. 1 beginning inventory, at $45 = 4 × $45 = **$180**

### Total inventory cost under FIFO:
\[
\text{Total Inventory Cost} = 350 + 576 + 180 = 1,106
\]

Thus, the inventory cost using the FIFO method is **$1,106**.

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Do you want further details or have any questions?

Here are 5 related questions for further exploration:
1. How would the inventory cost differ using the LIFO (Last-In, First-Out) method?
2. What is the impact of FIFO on a company's financial statements during inflationary periods?
3. How does the weighted-average cost method compare to FIFO in this scenario?
4. What are the advantages and disadvantages of using a periodic inventory system versus a perpetual inventory system?
5. How would the ending inventory change if additional purchases were made in December?

**Tip**: The FIFO method generally results in lower cost of goods sold (COGS) and higher inventory value during periods of rising prices, as older (cheaper) inventory is sold first.

The units of an item available for sale during the year were as follows:

Date	Line Item Description	Units	Cost per Unit	Amount
Jan. 1	Inventory	20 units	at $45	$900
Aug. 13	Purchase	12 units	at $48	576
Nov. 30	Purchase	7 units	at $50	350
Available for sale	39 units	$1,826
There are 23 units of the item in the physical inventory at December 31. The periodic inventory system is used. Determine the inventory cost using the (a) first-in, first-out (FIFO) method;

Learn how to calculate inventory cost using the FIFO method with 39 units available for sale and 23 units in stock. This problem breaks down inventory costing with details on the cost of goods sold, including step-by-step calculations for remaining units at different price points.

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