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29 October, 09:17

A company's inventory records report the following in November of the current year: Beginning November 1 5 units @ $20 Purchase November 2 10 units @ $22 Purchase November 12 6 units @ $25 On November 8, it sold 12 units for $54 each. Using the LIFO perpetual inventory method, what amount of gross profit was earned from the 12 units sold?

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  1. 29 October, 09:55
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    Gross profit = $388

    Explanation:

    Giving the following information:

    Beginning November 1: 5 units at $20

    Purchase November 2: 10 units at $22

    Purchase November 12: 6 units at $25

    On November 8, it sold 12 units for $54 each.

    LIFO (last-in, first-out)

    COGS = 10*22 + 2*20 = $260

    Gross profit = 12*54 - 260 = $388
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