Compute the cost of the ending inventory based on the LIFO method of inventory valuation.
A) $12,500.
B) $27,650.
C) $10,975
D) $29,175.

Question

Quizplus · Accepted Answer

Using the LIFO method, the ending inventory would be valued using the cost of the oldest units. The last units purchased for $9,450 (50 units x $189) and the 100 units purchased for $22,400 (100 units x $224) would be considered sold first. This would leave 150 units from the beginning inventory and the first purchase, which cost a total of $33,175 ($21,500 + $11,675). The cost of each unit would be $221.17 ($33,175/150 units). Therefore, the cost of the ending inventory would be 50 units x $221.17 = $11,058. Adding the cost of the 30 units purchased for $1,917 gives a total ending inventory value of $10,975 (rounded to the nearest dollar).

Compute the Cost of the Ending Inventory Based on the LIFO