Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month.Cost of goods sold assuming LIFO would be:
$$\begin{array} { | l | l | c | r | }
\hline \text { Date } & \text { Transaction } & \text { Number of Units } & \text { Unit Cost } \
\hline \text { Apr. 1 } & \text { Beginning inventory } & 500 & \$ 2.40 \
\text { Apr. 20 } & \text { Purchase } & 400 & 2.50 \
\hline
\end{array}$$

Question

Inventory records for Dunbar Incorporated revealed the following: Dunbar sold 700 units of inventory during the month.Cost of goods sold assuming LIFO would be:
$$\begin{array} { | l | l | c | r | } 
\hline \text { Date } & \text { Transaction } & \text { Number of Units } & \text { Unit Cost } \
\hline \text { Apr. 1 } & \text { Beginning inventory } & 500 & \$ 2.40 \
\text { Apr. 20 } & \text { Purchase } & 400 & 2.50 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Under LIFO (Last In, First Out), the most recent purchases are sold first. Dunbar sold 700 units, so we calculate the cost of goods sold (COGS) by using the most recent costs first:- From Apr. 20 purchase: 400 units at $2.50 = $1,000- From Apr. 1 beginning inventory: 300 units (700 total needed - 400 from Apr. 20) at $2.40 = $720Adding these together: $1,000 (from Apr. 20) + $720 (from Apr. 1) = $1,720.

Inventory Records for Dunbar Incorporated Revealed the Following: Dunbar Sold