Answer:
<u>Date Purchases Sales </u>
May 1 1,550 units at $44
May 10 720 units at $45
May 12 1,200 units
COGS (720 x $45 = $32,400)
COGS (480 x $44 = $21,120)
TOTAL COGS FOR MAY 12 SALE = $53,520
Inventory after sale 1,070 units at $44
May 20 1,200 units at $48
May 14 830 units
COGS (830 x $48 = $39,840)
TOTAL COGS FOR MAY 14 SALE = $39,840
Inventory after sale 1,070 units at $44
370 units at $48
May 31 1,000 units
COGS (370 x $48 = $17,760)
COGS (630 x $44 = $27,720)
TOTAL COGS FOR MAY 12 SALE = $45,480
Inventory after sale 440 units at $44
Under LIFO (last in, first out), the cost of goods sold is determined using the price of the last units purchased, which means that the most recent (or updated) price is used to calculate COGS.
