Question

Keck Co. had 300 units of product A on hand at January 1, 2017, costing $21 each. Purchases of product A during January were as follows:Date Units Unit CostJan. 10 400 $2218 500 2328 200 24A physical count on January 31, 2017 shows 400 units of product A on hand. The cost of the inventory at January 31, 2017 under the LIFO method isa. $9,400.b. $8,900.c. $8,500.d. $8,200.

Answer 1

c. $8,500

Step-by-step explanation:

The computation of the ending inventory using the LIFO method is shown below:

Since it is given that 400 units of product A are on hand which reflects the ending inventory units

So

= 300 units × $21 + 100 units × $22

= $6,300 + $2,200

= $8,500

The 100 units depicts the remaining units i.e

= 400 units - 300 units

= 100 units

First we take the Jan 1 units than the remaining units would take from Jan 10