Question

Allsop Company had no beginning inventory. The company purchases 300 units of inventory in January at $5 each, 500 units at $4 each in August, and 200 units at $6 each in November. The company sells 150 units during the year. Allsop uses a periodic inventory system and the LIFO inventory costing method. What is the cost of goods sold?

Answer 1

Answer: $900

Explanation: LIFO inventory costing method.

This means Last In First Out method. Since the last stock for the year was bought in Nov and the company sold 150 units.

Using LIFO method, 150 * $6 = $900