Question

Beginning inventory, purchases, and sales for an inventory item are as follows: Beginning inventory 150 units @ $755 Sale 120 units First purchase 400 units @ $785 Sale 200 units Second purchase 300 units @ $805 Sale 290 units The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. What is the total cost of ending inventory according to LIFO? $

Answer 1

Answer:

193200

Explanation:

Given that the beginning inventory 150 units @ $755 Sale 120 units First purchase 400 units @ $785 Sale 200 units Second purchase 300 units @ $805 Sale 290 units The firm uses the perpetual inventory system and there are 240 units of the item on hand at the end of the year. we can calculate the total cost of ending inventory according to FIFO  . According to fifo i.e first in first out the inventory that arrives first in the godown is sold first and ending inventory consists only of the inventory that arrives the latest in the godown

240 units *805 i.e 193200