Detailed Answer
Answer (B) is correct. Under the FIFO method, the 1,700 units of ending inventory are valued at the most recent prices. Ending inventory is assumed to include 1,000 units purchased November 24, 500 units purchased May 5, and 200 units purchased January 12. Hence, the ending inventory is $3,150 [(1,000 × $1.65) + (500 × $2.20) + (200 × $2.00)].