A Wesley Chapel warehouse issues 185 units using FIFO. The first layer has 110 units at $31.40 and the next layer has 170 units at $33.20. What cost should be charged to the job?
Correct Answer
A) $5,944.00
FIFO charges the oldest layer first, then the next layer for the remaining issued units.
Why This Is the Correct Answer
FIFO charges the oldest layer first, then the next layer for the remaining issued units.
Why the Other Options Are Wrong
Option B: $6,142.00
$6,142.00 is above the supported result for fifo inventory costing; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $5,809.00
$5,809.00 is below the supported result for fifo inventory costing; it likely uses the wrong base, period, or account bucket.
Option D: $9,098.00
$9,098.00 is above the supported result for fifo inventory costing; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Fifo Inventory Costing drawer for Job-Cost Clerk: label charges before counting dollars.
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Section Two, Inventory Costing, FIFO; use the job ledger figures in the stem and recompute the same accounting measure.
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