Question

The inventory records for Radford Co. reflected the following Beginning inventory @ May 1 First purchase @ May 7 second purchase @ May 17 Third purchase @ May 23 Sales @ May 31 1,200 units @ $4.00 1,300 units @ $4.20 1,500 units @ $4.30 1,100 units @ $4.40 3,900 units @ $5.90 Determine the amount of cost of goods sold assuming the LIFO cost flow method. Multiple Choice $15,600 $16,750 < Prev 6 of 11 Next >

Answer 1

LIFO = Last in first out. It means last purchase items are sold first

Number of units sold = 3,900 units

Cost of goods sold = (1,100 * $4.40) + (1,500 * $4.30) + (1,300 * $4.20)

Cost of goods sold = $16,750

Option '2' is correct

$16,750