Final answer:
To calculate the cost of ending inventory using LIFO for Lady in Red Corp, we start by deducting the latest purchased units. The ending inventory consists of 100 units at $30 each and 50 units at $32 each, totaling to $4,600.
Step-by-step explanation:
The Lady in Red Corp uses the periodic inventory system and the LIFO accounting method to calculate the cost of ending inventory. To compute the cost of the ending inventory when 150 units are sold using LIFO, we assume the last units purchased (i.e., the latest inventory) are sold first. Since 150 units were sold, we would deduct these starting from the last purchase made on September 27, 2015.
- Deduct the September 27 purchase of 50 units at $34 each.
- Deduct the September 18 purchase of 100 units at $33 each.
After selling 150 units, the remaining inventory includes:
- 100 units from September 1 at $30 each = $3,000
- 50 units from September 9 at $32 each = $1,600
Thus, the cost of the ending inventory using LIFO is $3,000 + $1,600 = $4,600.