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Convisor Company has a perpetual inventory system and uses the LIFO method of inventory costing. Convisor reported the following events during the month of June:

-The cost of goods sold for the June 5th sale is:
A)$500
B)$550
C)$600
D)$700

Question

Use the following to answer questions 
Convisor Company has a perpetual inventory system and uses the LIFO method of inventory costing. Convisor reported the following events during the month of June:
 
-The cost of goods sold for the June 5th sale is:
A)$500 
B)$550 
C)$600 
D)$700

Quizplus · Accepted Answer

According to the LIFO method of inventory costing, the most recent inventory costs are the first to be expensed when calculating the cost of goods sold. Therefore, the cost of goods sold for the June 5th sale is calculated as the cost of the 20 units from the June 3rd purchase ($250) plus 10 units from the June 8th purchase ($300) for a total of $550 (Option B).

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