Answer:
$1,330
Explanation:
According to the LIFO method, the last inventory in should be the first out. That is, the units purchased at the 22nd should be the first sold, followed by the ones purchased at the 7th and then by the beginning inventory on July 1st.
The number of units sold during July is:
[tex]n=20+70+10-35\\n=65\ units\\[/tex]
Using LIFO, the amount allocated to those goods should come from 10 units at $23 and 55 units at $20:
[tex]COGS = 10*\$23+55*\$20\\COGS = \$1,330[/tex]
Therefore, the amount allocated to cost of goods sold for July is $1,330.
None of the alternatives provided are correct.
Answer:
$1,330
Explanation:
July operation units unit price total
1 Beginning Inventory 20 $19 $380
7 Purchases 70 $20 $1,400
22 Purchases 10 $23 $230
Total 100 $2,010
31 Ending balance 35
20 $19 $380
15 $20 $300
Total 35 $680
Cost of goods sold = total inventory purchases - ending balance (using LIFO) = $2,010 - $680 = $1,330
when you use last in, first out (LIFO) the last units purchased are the first units to be sold.
Cost of goods sold
10 units x $23 = $230
55 units x $20 = $1,100
total $1,330
