Question

A company purchased two identical items. Item 101 purchased in October cost $100. Item 102 purchased in November cost $110. The business uses the Last-in, first-out (LIFO) cost flow method. If item 101 is sold to a customer, the amount assigned to cost of goods sold is ______.

Answer 1

$110

Step-by-step explanation:

LIFO means last in first out. It means that its the last purchased inventory that is the first to be sold.

If the LIFO method is used, the cost of goods sold would be the cost of purchasing inventory 102 which was the inventory that was purchased last.

The cost of inventory 102 is 110