At the beginning of the year, Panasonic had 2000 kg of nichrome, a type of raw material used in the production of both hair dryers and hair curlers, valued at $10 per kg in its inventory. Due to declining prices of nickel, Panasonic only had to pay $8 per kg for nichrome purchased during the year. It purchased 2,000 kg and used 3,500 kg of nichrome for production during the year. Panasonic uses FIFO to account for its nichrome inventory