tb mc qu. 05 - 106 (static) a companys inventory records indicate the following... a companys inventory…
tb mc qu. 05 - 106 (static) a companys inventory records indicate the following... a companys inventory records indicate the following data for the month of january date activities units acquired at cost units sold at retail january 1 beginning inventory 360 units @ $18 = $6,480 january 8 purchase 340 units @ $20 = $6,800 january 12 sale 600 units @ $70 january 17 purchase 400 units @ $22 = $8,800 january 23 sale 300 units @ $70 january 28 purchase 460 units @ $24 = $11,040 if the company uses the lifo periodic inventory system, what is the value of cost of goods sold? multiple choice $17,680 $18,080 $20,640 $15,040
Answer
Explanation:
Step1: Calculate total units sold
The total units sold are $600 + 300=900$ units.
Step2: Allocate costs using LIFO
We start with the most recent purchases. From the January 28 purchase of 460 units at $24 each, we use 460 units. Cost for these units is $460\times24 = 11040$. The remaining units to account for are $900 - 460=440$ units. From the January 17 purchase of 400 units at $22 each, we use 400 units. Cost for these units is $400\times22 = 8800$. The remaining units are $440 - 400 = 40$ units. From the January 8 purchase of 340 units at $20 each, we use 40 units. Cost for these units is $40\times20=800$.
Step3: Calculate cost of goods sold
The cost of goods sold is $11040+8800 + 800=20640$.
Answer:
$20640$ (corresponds to the third multiple - choice option)