Total Cost 6 72 301 104 Unit Units Units 12 43 13 Cost Sold

Total Cost $6 72 301 104 Unit Units Units 12 43 13 Cost Sold Beginning inventory Purchase on Apr 25 Purchase on Nov 16 Sales Seaspray Sales\' LIFO cost of ending inventory would be OA. $91 O B. $79 O C. $104 OD, $440 Click to select your answer

Solution

B. $ 79

Working:

Cost of per unit sold = $ 398/55 = $ 7.24

LIFO stands for last-in-first out. It means inventory which is bought last is sold first.
So, Sales of 55 units will be as follows:
		Units	Unit cost	Total Cost
Purchase on Nov 16	13	$             8	$        104
Purchase on Apr 25	42	$             7	$        294
Total		55		$        398
Costs of goods available will be as follows:
		Units	Unit cost	Total Cost
Beginning Inventory	12	$             6	$          72
Purchase on Apr 25	43	$             7	$        301
Purchase on Nov 16	13	$             8	$        104
Total				$        477
Costs of Ending Inventory	=	Costs of goods available for sale - Costs of goods sold
			=	$        477		-		$        398
			=	$          79