211807 e Edt Yew Hgtory ools Help Big Apple Made Net Sale s

2118-07 e Edt Yew Hgtory ools Help ©Big Apple × Made Net Sale s of Finan (1) eyobe Test: Exam 2 Chapter 5-8 Submt Tes : 3 pts 6 of 31 This Test: 100 pts method, wht is the amoust of Cost of Goods Sold on the income statement for the year ending December 317 (Assume that the company uses a perpetual inventory syitem) O A $5,400 O B. $17.400 O C. S7.350 O D. $12,000 Ask me anything D LL

Solution

Solution :answer is C. $7,350

Explanation:

In the given Question Company is using LIFO ( Last-in First out ) method. In LIFO method, while calculating Cost of goods sold we first take last purchased inventory and then the second last inventory and so on.

In the given case, Total sales quantity is 200 units.

so, we first choose last inventory i.e. 135 units and balance from 400 units.

Cost of goods sold = 135 x 40 + 65 x 30

. = 5,400 + 1,950

   = $7,350