He following units of an inventory item were available for sale during the year: Beginning inventory 10 units at $52 First purchase 19 units at $50 Second purchase 25 units at $55 Third purchase 14 units at $64 The firm uses the periodic inventory system. During the year, 48 units of the item were sold. The value of ending inventory using FIFO is

a.$2,176

b.$981

c.$1,746

d.$1,226

d.$1,226

Explanation:

First-in-first out: In this method, the company sell the old products than the new that means first sold the old products and then the new products are sold

Since 48 units are sold which are comprises below:

10 units at $52

19 units at $50

19 units at $55

The remaining units are considered the ending inventory

= 6 units * $55 + 14 units * $64

= $330 + $896

= $1,226

In the second purchase, 19 units are sold and 6 units are remaining