Question

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From the following, calculate the cost of ending inventory and cost of goods sold for the...

From the following, calculate the cost of ending inventory and cost of goods sold for the LIFO method, ending inventory is 54 units. (Round your answers to the nearest cent.)

Beginning inventory
and purchases		 Units Unit cost
January 1 6 $ 1.00
April 10 9 1.50
May 15 13 2.00
July 22 14 2.25
August 19 19 3.00
September 30 19 3.20
November 10 33 3.40
December 15 15 3.80
Cost of ending inventory $
Cost of goods sold $

Solutions

Expert Solution

Number of units sold = Beginning inventory + purchases - ending inventory

= 6 + (9 + 13 + 14 + 19 + 19 + 33 + 15) - 54

= 74 units

According to the LIFO method, goods purchased last are assumed to be sold first in order to calculate cost of goods sold and cost of ending inventory.

Therefore,

(a) Cost of goods sold = (15 x $3.80) + (33 x $3.40) + (19 x $3.20) + (7 x $3)

= $57 + $112.2 + $60.8 + $21

= $251

(b) cost of ending inventory = (12 x $3) + (14 x $2.25) + (13 x $2) + (9 x $1.50) + (6 x $1)

= $36 + $31.5 + $26 + $13.5 + $6

= $113

ekkarill92 answered 1 year ago
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