Question

Determine the cost of merchandise sold for the transaction on October 8 using the perpetual inventory system and the LIFO method. Date Item Units Cost Total Beginning inventory 5 $10 $50 October 4 Purchase 8 12 96 October 8 Sale 6 October 20 Purchase 15 14 210 October 25 Sale 12

a.$96
b.$72
c.$210
d.$62

Answer 1

b.$72

Step-by-step explanation:

The computation of the cost of merchandise sold using the LIFO method for October 8 is shown below:

Since on October 8, the 6 units are sold

So under the LIFO method, the 6 units rate is taken from the October 6 i.e $12

So, the cost of merchandise sold is

= 6 units × $12

= $72

All the other information which is mentioned in the question is not relevant. hence, ignored it