Question
In: Accounting
The following information was collected from the inventory records of a company for the month of...
The following information was collected from the inventory records of a company for the month of March, 2010. During March the company sold 90 units of its product at $25 per unit.
|
Date |
Units |
Unit Cost |
Total Cost |
|
|
Beginning inventory |
March 1 |
15 |
$10.00 |
$150 |
|
Purchase |
March 5 |
35 |
$12.00 |
$420 |
|
Purchase |
March 10 |
70 |
$14.00 |
$980 |
|
Purchase |
March 17 |
25 |
$15.00 |
$375 |
Determine cost of goods sold under LIFO for the
month of March.
answer choices: 1285, 640, 1130, 795
Solutions
Expert Solution
The cost of goods sold under LIFO for the month of March is calculated as follows:
| Date | Purchase | Sale | Ending Inventory | |
|---|---|---|---|---|
| March 1 | Begining | 15 units * $10 = $150 | ||
| March 5 | Purchase | 35 units * $12 = $420 | 15 units * $10 = $150 | |
| 35 units * $12 = $420 | ||||
| March 10 | Purchase | 70 units * $14 = $980 | 15 units * $10 = $150 | |
| 35 units * $12 = $420 | ||||
| 70 units * $14 = $980 | ||||
| March 17 | Purchase | 25 units * $15 = $375 | 15 units * $10 = $150 | |
| 35 units * $12 = $420 | ||||
| 70 units * $14 = $980 | ||||
| 25 units * $15 = $375 | ||||
| March 31 | Sale | 15 units * $10 = $150 | 30 units * $14 = $420 | |
| 35 units * $12 = $420 | 25 units * $15 = $375 | |||
| 40 units * $14 = $560 | ||||
| 55 units = $795 |
Ending Inventory = $795
Cost of goods sold under LIFO for the month of March is calculated as follows:
Cost of goods sold = Begining Inventory + Purchases - Ending Inventory
= $150 + ($420 + $980 + $375) - $795
= $150 + $1,775 - $795
= $1,130
Cost of goods sold under LIFO for the month of March is $1,130
So correct answer is an option (3) or $1,130
ekkarill92 answered 2 years agoRelated Solutions
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Required:
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The following information is taken from the inventory records of
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7,000
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Purchases:
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3,000
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4,000
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11.00
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Factory Property taxes Expense 9,600
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1
3,100
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Units
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6
12
19
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Purchase #2
Purchase #3
Purchase #4
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100
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125
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150
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December 31, 2019
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Work In Process
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Transaction
Number of Units
Cost per Unit
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Beginning Inventory
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$5.00
3
Purchase No. 1
400
$5.00
5
Sale No. 1
600
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Sale No. 3
700
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Purchase No. 3
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