Question

Boxwood company sells blankets for 39 each. The following information was taken from the inventory records during May. The company had no beginning inventory on May 1. Boxwood uses a perpetual inventory system. Date Blankets Units Cost May 3 Purchase 1018 10 Sale 4 17 Purchase 16 17 20 Sale 5 23 Sale 2 30 Purchase 1223 Determine the cost of goods sold for the sale of May 20 using the LIFO inventory costing method?

1) 34
2) 276
3) 72
4) 85

Answer 1

The question involves calculating the cost of goods sold using the LIFO method for a sale that occurred on May 20. The necessary data on costs and quantities is missing, making it impossible to provide a correct calculation.

Step-by-step explanation:

The issue presented involves the calculation of cost of goods sold (COGS) using the Last-In, First-Out (LIFO) inventory costing method for the Boxwood company that sells blankets. Unfortunately, the data on the cost per unit for purchases and the quantities sold on May 20 is missing, which is essential for calculating COGS under the LIFO method. Without this information, providing an accurate answer is not possible.

To solve such problems, under the LIFO method, one would typically use the cost of the most recently purchased inventory to calculate the COGS for the latest sale. With the cost and quantity of the last purchase known, you would multiply the quantity sold by this cost to find the COGS. If the quantity sold exceeds the latest purchase, you would continue to use the costs from previous purchases in reverse chronological order until the total quantity sold has been accounted for.