question archive The inventory records for Radford Co
The inventory records for Radford Co
Subject:AccountingPrice:3.87 Bought7
The inventory records for Radford Co. reflected the following
|
Beginning inventory @ May 1 |
100 |
units @ |
$ 4.00 |
|
First purchase @ May 7 |
300 |
units @ |
$ 4.40 |
|
second purchase @ May 17 |
500 |
units @ |
$ 4.60 |
|
Third purchase @ May 23 |
100 |
units @ |
$ 4.80 |
|
Sales @ May 31 |
900 |
units @ |
$ 7.80 |
Determine the amount of cost of goods sold assuming the LIFO cost flow method.
A) $4,100
B) $4,320
C) $2,360
D) $3,600
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Answer:
A )
Step-by-Step explanation
LIFO cost flow method says that the most recently purchased inventory will be assigned first to the cost of goods sold. Hence, the sales made of 900 units will include the following inventories:
100 units @ 4.80 purchased on May 23 = $480
500 units @ 4.60 purchased on May 17 = $2,300
300 units @ 4.40 purchased on May 07 = $1,320
The total cost of goods sold = $4,100.
