Question

Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning Inventory 500 $ 2.40 Apr. 20 Purchase 400 2.50 Dunbar sold 700 units of inventory during the month. Cost of goods sold assuming LIFO would be_____________.

Answer 1

Answer:

$1,720

Explanation:

Given that,

Date     Transaction                Number of Units       Unit Cost

Apr. 1    Beginning Inventory     500                           $2.40

Apr. 20  Purchase                      400                           $2.50

Units sold during the month = 700 units

Cost of goods sold assuming LIFO:

= (Inventory purchase on April 20 × Unit cost at April 20) + [(Inventory sold - Inventory purchase) × Unit cost at April 1]

= (400 units × $2.50) + [(700 units - 400 units) × $2.40]

= $1,000 + $720

= $1,720