https://file.aiquickdraw.com/mathbot/file/1729094645447v2zoi2uo.jpg

Let's walk through how to solve the **ending inventory** and **cost of goods sold (COGS)** from the image using the **specific identification method**.

---

### Data extracted:
- **June 1:** 15 units purchased @ $275/unit  
- **July 1:** 45 units purchased @ $250/unit  
- **August 1:** 60 units purchased @ $240/unit

**Ending Inventory Breakdown:**
- **2 units from June** @ $275 each  
- **15 units from July** @ $250 each  
- **12 units from August** @ $240 each  

---

### Part (a) Calculate the cost of **Ending Inventory:**

We apply the specific cost for each of the units still in stock.

\[
\text{Ending Inventory} = (2 \times 275) + (15 \times 250) + (12 \times 240)
\]

Breaking this down:
- $2 \times 275 = 550$
- $15 \times 250 = 3750$
- $12 \times 240 = 2880$

\[
\text{Total Ending Inventory} = 550 + 3750 + 2880 = 7180
\]

So, the **cost of ending inventory** = **$7,180**

---

### Part (b) Calculate the **Cost of Goods Sold (COGS):**

First, find the **total units purchased** and their cost:

- **Total units purchased** = 15 (June) + 45 (July) + 60 (August) = **120 units**  
- **Total cost of all units** =  
  $15 \times 275 + 45 \times 250 + 60 \times 240$  
  $= 4125 + 11250 + 14400 = 29775$

Next, subtract the value of ending inventory from the total cost to get **COGS**:

\[
\text{COGS} = \text{Total Cost} - \text{Ending Inventory}
\]

\[
\text{COGS} = 29775 - 7180 = 22595
\]

So, the **Cost of Goods Sold (COGS)** = **$22,595**

---

### Final Answers:
- **Ending Inventory**: $7,180  
- **Cost of Goods Sold (COGS)**: $22,595

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Do you have any questions, or would you like more explanation?

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### 5 Follow-up Questions:
1. How does the **specific identification method** differ from FIFO and LIFO?
2. What is the impact of using **specific identification** on financial statements?
3. Why is **COGS** important for businesses?
4. How does choosing a different inventory method (e.g., FIFO) affect ending inventory?
5. Can you think of industries where the **specific identification method** is most useful?

**Tip:** The specific identification method works best when items are easily distinguishable, such as high-value goods or custom products.

Using the specific identification method: Calculate the cost of ending inventory and the cost of goods sold (COGS) based on the data provided.

Learn how to calculate the ending inventory and cost of goods sold (COGS) using the specific identification method. This problem involves evaluating inventory across multiple purchases and applying unit-specific costs. Ideal for students studying accounting or business courses.

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