Question

Sales during the year were 500 units. Beginning inventory was 250 units at a cost of $5 per unit. Purchase 1 was 400 units at $6 per unit. Purchase 2 was 200 units at $7 per unit.

Cost of goods sold under the LIFO cost flow assumption (using a periodic inventory system) was:

$1850

$3200

$2750

$3800

Answer 1

Correct answer-----------$3,200

Working

LIFO
Total Units Avalable for sale		850
Units Sold		500
Closing Stock in Units		350
Valuation
Ending Inventory	250	@	$               5.00	$ 1,250
	100	@	$               6.00	$ 600
Value Of Ending Inventory				$              1,850
Cost of Goods sold	(5050-1850)			$              3,200