A firm purchased 25 units of materials with a unit price of $2.00 on May 5.On May 15,the firm purchased 25 units with a unit price of $2.10.If the firm uses the LIFO method of inventory pricing,the total cost of 30 units issued on May 20 would be

Question

Quizplus · Accepted Answer

LIFO (Last-In, First-Out) assumes that the most recently purchased items are the first to be sold. Therefore, the 30 units issued on May 20 would include the 25 units purchased on May 15 at $2.10 per unit, totaling $52.50, and 5 units from the 25 units purchased on May 5 at $2.00 per unit, totaling $10.00. The total cost of the 30 units issued would be $52.50 + $10.00 = $62.50.

A Firm Purchased 25 Units of Materials with a Unit