Question

Bern Company has 100 units costing $200 in beginning inventory. During the year, the company purchases 900 additional units for $1,980. At the end of the year, 200 units remain unsold. If Bern Company utilizes the LIFO method, cost of goods sold will be

Answer 1

Answer:

$1,760

Explanation:

The computation of the cost of goods sold is shown below:

As we know that

Cost of goods sold = Opening inventory units + purchase units - ending inventory units

= 100 units + 900 units - 200 units

= 800 units

Now the per unit is

= $1,980 ÷ 900 units

= $2.2

So, the cost of goods sold under the LIFO method is

= 800 units × $2.2

= $1,760