Assuming that Beech Soda uses the LIFO flow assumption, the 28 units of this product in inventory at January 31 have a total cost of:
A) $400.
B) $395.
C) $405.
D) $410.

Question

Quizplus · Accepted Answer

As LIFO (Last in, First out) method assumes that the last units purchased are the first ones sold, the cost of the most recent purchase is used to value the inventory. In this case, the purchase of 20 units on January 20 was the most recent purchase before the end of the month. Therefore, the total cost of the 28 units in inventory at January 31 is calculated as follows:

20 units x $17 = $340 
8 units x $7 = $56 
Total cost = $340 + $56 = $396

Therefore, the closest answer is B ($395).

Assuming That Beech Soda Uses the LIFO Flow Assumption, the 28