Question

The inventory records for Radford Co. reflected the following Beginning inventory @ May 1 500 units @ $ 2.60 First purchase @ May 7 600 units @ $ 2.80 second purchase @ May 17 800 units @ $ 2.90 Third purchase @ May 23 400 units @ $ 3.00 Sales @ May 31 1,800 units @ $ 4.50 Determine the amount of cost of goods sold assuming the LIFO cost flow method.

Answer 1

$5,200

Step-by-step explanation:

Given that,

Beginning inventory @ May 1 500 units @ $ 2.60

First purchase @ May 7 600 units @ $ 2.80

Second purchase @ May 17 800 units @ $ 2.90

Third purchase @ May 23 400 units @ $ 3.00

Sales @ May 31 1,800 units @ $ 4.50

Cost of goods sold under LIFO cost flow method:

= Third purchase @ May 23 + Second purchase @ May 17 + First purchase @ May 7

= (400 × $3.00) + (800 × $2.90) + (600 × $2.80)

= $1,200 + $2,320 + $1,680

= $5,200