Question

Eastview Company uses a perpetual LIFO inventory system and has the following purchases and sales: January 1 150 units were purchased at $9 per unit. January 17 120 units were sold. January 20 160 units were purchased at $11 per unit. January 29 150 units were sold. What is the value of the cost of goods sold?
a. $2,730
b. $2,750.
c. $2,670.
d. $440.
e. $380

Answer 1

Answer:

$2,730

Explanation:

Under the last -in-first-out (LIFO) method, inventory are priced using the price of the newest/latest batch in stock until a new batch is received after which the price of the new batch is used and this is continued.

So we adopt this principle as follows:

Unit Sold             Workings             Cost of good sold ($)

120                 120 × $9             =           1,080

150                 150  × $11            =           1,650

                                                                2,730

The total cost of goods sold = 1080 + 2,730

                                             = $2,730