Question

Calculator The units of Manganese Plus available for sale during the year were as follows: Mar. 1 Inventory 23 units $29 $667 June 16 Purchase 27 units $34 918 Nov. 28 Purchase 37 units Ⓡ$35 1,295 87 units $2,880 There are 11 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the difference in gross profit between the LIFO and FIFO inventory cost systems. Enter the answer as a positive number. FIFO Cost of Goods Sold LIFO Cost of Goods Sold Difference

Answer 1

Answer

• Units sold = 87 units – 11 units = 76 units
• Requirement

FIFO Cost of Goods Sold = $ 2495
LIFO Cost of Goods Sold= $ 2561
Difference = $ 66

• Workings

FIFO	Cost of Goods available for sale			Cost of Goods Sold
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS
Beginning Inventory	23	$                29.00	$                            667.00	23	$               29.00	$                     667.00
Purchases:
16-Jun	27	$                34.00	$                            918.00	27	$               34.00	$                     918.00
28-Nov	37	$                35.00	$                        1,295.00	26	$              35.00	$                     910.00
TOTAL	87		$                        2,880.00	76		$                 2,495.00
LIFO	Cost of Goods available for sale			Cost of Goods Sold
	Units	Cost/unit	COG for sale	Units sold	Cost/unit	COGS
Beginning Inventory	23	$                29.00	$                            667.00	12	$               29.00	$                     348.00
Purchases:
16-Jun	27	$                34.00	$                            918.00	27	$               34.00	$                     918.00
28-Nov	37	$                35.00	$                        1,295.00	37	$               35.00	$                 1,295.00
TOTAL	87		$                        2,880.00	76		$                 2,561.00