Question

The Light Source made the following purchases of a candle holders during the year: 15 at $8.50 each, 25 at $9.25 each, 15 at $11.25 each, and 35 at $7.55 each.

An inventory shows that 22 candle holders remain.

Find the value of the inventory using the LIFO method.

Round to the nearest dollar amount.

Answer 1

$192

Explanation:

The last in, first out (LIFO) method is used to place an accounting value on inventory. The LIFO method operates under the assumption that the last item of inventory purchased is the first one sold.

So,

According to the description

1 - 15 at $8.50 each

2 - 25 at $9.25 each

3 - 15 at $11.25 each

4 - 35 at $7.55 each

Total number of candle holders = 90

total number of candle holder sold = 90 - 22

= 68

First batch

68 -35 = 33

Second batch

33 - 15 = 18

Third batch

25 - 18 = 7

So inventory left

7 * $9.20 = $64.4

15 * $8.50 = $127.5

Total = 64.4 + 127.5

= $191.9

≈ $192