Question

Carryable CDs has the following inventory data: Nov. 1 8 17 25 Inventory Purchase Purchase Purchase 31 units @ $6.20 each 125 units @ $6.70 each 62 units $6.55 each 94 units @ $6.90 each A physical count of merchandise inventory on November 30 reveals that there are 104 units on hand. Cost of goods sold under LIFO is 13, 5681. 1403 714 Attempts of 1 used Submit ها هاااله الاله الدال والد ال

Answer 1

Answer : C . $1,403

Explanation:

Ending inventory under LIFO method

The last in first out (LIFO) method is used to place an accounting value on inventory. The LIFO method operates under the assumption that the last item of inventory purchased is the first one sold and inventory which purchased first will remain in ending inventory.

Total units purchased = 31 + 125 + 62 + 94 = 312

Less : units on hand at the end = (104)

Total units sold = 208 .

Therefore we need to calculate COGS for 208 units :

i) 1 Nov purchased 31 units will completely stay as ending inventory

ii) 8 Nov purchased 125 units,out of this 73 stay in ending inventory and remaining 52 units are sold during the month

iii) 17 Nov purchased 62 units, which are sold during the month

iv) 25 Nov purchased 94 units, which are also sold during the year.

That implies,

COGS = 94 units × $6.90 per unit + 62 units × $6.55 per unit + 52 units × $6.70 per unit

= $648.6 + $406.1 + $348.4

= $1,403.1

= $1,403 (rounded off)