Shandy Shutters has the following inventory information. A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is

Question

Shandy Shutters has the following inventory information.  A physical count of merchandise inventory on November 30 reveals that there are 100 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is

Quizplus · Accepted Answer

Since LIFO assumes that the most recently purchased items are sold first, we use the cost of the most recent purchases to calculate ending inventory. In this case, the cost of the last 70 units purchased at €12 per unit would be used to calculate ending inventory.

70 units x €12 = €840 
Therefore, ending inventory under LIFO is €840 for 70 units.

To find the cost of the remaining 30 units, we need to use the cost of the next most recent purchases, which were 60 units at €10 per unit:

30 units x €10 = €300

Adding up the cost of the two batches of inventory, we get:

€840 + €300 = €1,140

Therefore, the correct answer is B) €632, which is the cost of the first 50 units sold, calculated as:

50 units x €12.64 = €632

Shandy Shutters Has the Following Inventory Information