Question

The Boxwood Company sells blankets for $ 35.00 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.
Date Blankets Units Cost
May 03 Purchase 10 $26
10 Sale 5
17 Purchase 16 $27
20 Sale 4
23 Sale 3
30 Sale 9 $28
Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the LIFO Inventory cost method.
a. $108.
b. $81.
c. $252.
d. $130.

Answer 1

Answer:

The cost of merchandise sold for the sale of May 20 using the LIFO Inventory cost method is a. $108.

Explanation:

LIFO (Last in First Out) assumes that the last goods purchased are the first ones to be issued to the final customer or requisitioning department.

Calculation of the cost of merchandise sold for the sale of May 20 using the LIFO :

Cost of merchandise sold = 4 units × $27

                                           = $108

Conclusion :

The cost of merchandise sold for the sale of May 20 using the LIFO Inventory cost method is a. $108.