Question

A company reports the following beginning inventory and two purchases for the month of January. On January 26, the company sells 450 units. Ending inventory at January 31 totals 245 units. Units Unit Cost Beginning inventory on January 1 400 $ 3.00 Purchase on January 9 120 5.00 Purchase on January 25 175 4.00 rev: 10_22_2018_QC_CS-142492 Assume the perpetual inventory system is used. Determine the costs assigned to ending inventory when costs are assigned based on LIFO.

Answer 1

Answer- The costs assigned to ending inventory when costs are assigned based on LIFO = $735.

Explanation-

LIFO Method
	Goods purchased		Cost of goods sold			Inventory balance
Date	# of units	Cost per unit	# of units sold	Cost per unit	Cost of goods sold	# of units	Cost per unit	Inventory balance
Jan-01						400	3.00	1200
Jan-09	120	5.00				400	3.00	1200
						120	5.00	600
Jan-25	175	4.00				400	3.00	1200
						120	5.00	600
						175	4.00	700
			175	4.00	700	245	3.00	735
			120	5.00	600
			155	3.00	465
Totals			450		1765	245		735