Final answer:
The cost of ending inventory using LIFO when ending inventory shows 57 units is $564, and the cost of goods sold using LIFO is $988. This is calculated by starting with the most recent purchases and working backwards until all 57 units are accounted for, and then subtracting the cost of ending inventory from the total cost of all units.
Step-by-step explanation:
To calculate the cost of ending inventory using LIFO (Last-In, First-Out), we must start with the most recent purchases and work backwards until we account for 57 units. Here is how you do it:
- Start with the most recent purchase on November 1st: 51 units at $10 per unit.
- From this, we subtract 51 units from the ending inventory of 57 units, leaving us with 6 units to account for.
- Next, we move to the June 1st purchase and take the remaining 6 units at $9 per unit.
The cost of ending inventory using LIFO can be calculated as:
51 units * $10/unit + 6 units * $9/unit = $510 + $54 = $564.
To calculate the cost of goods sold using LIFO, we subtract the cost of ending inventory from the total cost of all units purchased. Here is the calculation:
Total cost of all units = $1,552
Cost of goods sold using LIFO = Total cost of all units - Cost of ending inventory
Cost of goods sold using LIFO = $1,552 - $564 = $988.