. . The Sunshine company uses periodic inventory system. The company makes a physical count at the end of each accounting period to find the number of units in ending inventory. The company then applies first-in, first-out (FIFO) method to compute the cost of ending inventory The information about the inventory balance at the beginning and purchases made during the year 2016 are given below: Mar. 01: Beginning balance: 400 units @ $18 per unit. Mar 12: Purchases: 600 units @ $20 per unit. Oct. 17: Purchases: 800 units @ $22 per unit. Dec. 15. Purchases; 200 units @ $24 per unit On 31st December 2016, 600 units are on hand according to physical count: Required: Compute the following using first-in, first-out (FIFO) method: 1. Cost of ending inventory at 31 December 2016. 2. Cost of goods sold during the year 2016 - Solution: (1) Cost of ending inventory -- FIFO method: . The Galaxy manufacturing company has provided the following information about beginning balance and purchases of direct material for the year 2016: 01 Jan: Beginning balance: 2,800 units @ $9.20 per units. 15 Apr: Purchases: 2,000 units @ $9.50 per units. 20 Aug: Purchases: 2,500 units @ $9.80 per units. 15 Nov: Purchases: 1.000 units @ $10.20 per units. At the end of the year 2016, the company makes a physical measure of material and finds that 1,700 units of material is on hand Required 1. Compute the cost of materials on hand at the end of the year. 2. Also compute the cost of materials issued to production during the year. (1) Cost of materials on hand at the end of the year - FIFO method