The Acme Corporation buys 300 units of merchandise in January at $5 each.Acme buys 500 units at $4 each in February and 200 units at $6 each in March.Acme sells 150 units during this quarter.Acme uses the LIFO Method.What is its cost of goods sold for the quarter?

Question

Quizplus · Accepted Answer

Under the LIFO method, the last items purchased are the first to be sold. Acme sold 150 units, so the cost of goods sold is based on the March purchase of 200 units at $6 each. Therefore, the cost of goods sold is 150 units x $6 = $900.

The Acme Corporation Buys 300 Units of Merchandise in January