Question

Inventory records for Dunbar Incorporated revealed the following: Date Transaction Number of Units Unit Cost Apr. 1 Beginning inventory 490 $ 2.16 Apr. 20 Purchase 420 2.63 Dunbar sold 570 units of inventory during the month. Ending inventory assuming LIFO would be: (Do not round your intermediate calculations. Round your answer to the nearest dollar amount.) Multiple Choice $1,105. $734. $894. $1,058.

Answer 1

The ending inventory value for Dunbar Incorporated assuming LIFO is $734. This is calculated by first deducting the units sold from the most recent purchases and then using the remaining older inventory to determine the end stock.

Step-by-step explanation:

The question involves calculating the ending inventory value for Dunbar Incorporated using the Last-In, First-Out (LIFO) inventory costing method. To compute the ending inventory under LIFO, we subtract the number of units sold from the most recent purchases before moving on to the older inventory. Since Dunbar sold 570 units, we first deduct units from the April 20 purchase (420 units at $2.63 each).

The remaining 150 units sold are then deducted from the beginning inventory of April 1, which consists of 490 units at $2.16 each. The ending inventory consists of the remaining units from the beginning inventory that were not sold, hence 490 units (beginning inventory) - 150 units (sold from beginning inventory) = 340 units left. Therefore, the value of the ending inventory under LIFO would be 340 units × $2.16 = $734.40, which is rounded to the nearest dollar amount as $734.

Answer 2

The correct answer is B.

Step-by-step explanation:

Giving the following information:

Apr. 1: Beginning inventory of 490 units for $2.16

Apr. 20: Purchase 420 units for $2.63

Dunbar sold 570 units of inventory during the month.

Under LIFO (last-in, first-out) method, the ending inventory is integrated by the first units incorporated into inventory.

First, we need to calculate the number of units in inventory:

Ending inventory in units= total units for sale - units sold

Ending inventory in units= (490 + 420) - 570= 340 units

Ending inventory ($)= 340*2.16= $734.4