Given the following: LIFO method 250 units left in inventory $$\begin{array} { | l | l | l | }
\hline \text { Beginning inventory } & 200 \text { units at } \$ 6 & \$ 1,200 \
\hline \text { Purchases: } & & \
\hline \text { Apr 10 } & 400 \text { units at } \$ 7 & \$ 2,800 \
\hline \text { May 15 } & 250 \text { units at } \$ 7 & \$ 1,600 \
\hline \text { Tuly } 9 & 200 \text { units at } \$ 8 & \$ 1,600 \
\hline \text { Oct } 8 & 100 \text { units at } \$ 11 & \$ 1,100 \
\hline
\end{array}$$ The cost of ending inventory is:
A)$1,550
B)$2,300
C)$1,200
D)$3,200
E)None of these

Question

Given the following: LIFO method 250 units left in inventory $$\begin{array} { | l | l | l | } 
\hline \text { Beginning inventory } & 200 \text { units at } \$ 6 & \$ 1,200 \
\hline \text { Purchases: } & & \
\hline \text { Apr 10 } & 400 \text { units at } \$ 7 & \$ 2,800 \
\hline \text { May 15 } & 250 \text { units at } \$ 7 & \$ 1,600 \
\hline \text { Tuly } 9 & 200 \text { units at } \$ 8 & \$ 1,600 \
\hline \text { Oct } 8 & 100 \text { units at } \$ 11 & \$ 1,100 \
\hline
\end{array}$$ The cost of ending inventory is:
A)$1,550
B)$2,300
C)$1,200
D)$3,200
E)None of these

Quizplus · Accepted Answer

Under the LIFO method, the last items purchased are the first to be used. Therefore, the ending inventory consists of the oldest costs. The 250 units left in inventory would be from the beginning inventory (200 units at $6) and 50 units from the April 10 purchase (50 units at $7). The cost is (200 x $6) + (50 x $7) = $1,200 + $350 = $1,550.

Given the Following: LIFO Method 250 Units Left in Inventory