Bordeaux Corp., a French subsidiary of a US company, sells one product and uses a perpetual inventory system. The beginning the inventory consisted of 20 units that cost €2,000 per unit. During the current month, the company purchased: 120 units at €2,100 each. Sales during the month totaled 90 units for €4,350 each. What is the cost of goods sold using the LIFO cost flow assumption?

Question

Quizplus · Accepted Answer

Under LIFO, the last items purchased are the first to be sold. Bordeaux Corp. sold 90 units, so the cost of goods sold is based on the most recent purchase price: 90 units x €2,100 = €189,000.