June Corp. sells one product and uses a perpetual inventory system. The beginning inventory consisted of 40 units that cost $20 per unit. During the current month, the company purchased 240 units at $20 each. Sales during the month totaled 180 units for $43 each. What is the cost of goods sold using the LIFO method?
A) $ 800.
B) $3,600.
C) $4,800.
D) $7,740.

Question

Quizplus · Accepted Answer

Under the LIFO (Last-In, First-Out) method, the most recently purchased items are sold first. June Corp. sold 180 units. Since all units cost the same ($20 each), regardless of whether they were part of the beginning inventory or purchased during the month, the cost of goods sold is 180 units x $20 = $3,600.

June Corp Sells One Product and Uses a Perpetual Inventory System