Question

King Costume started the month with 8 masks in its beginning inventory that cost $10 each. During the month, King Costume purchased 40 additional masks for $12 each. At the end of the month, King counted its inventory and found that 5 masks remained unsold. If King Costume uses LIFO periodic, its Cost of Goods Sold for the month isa. $434.
b. $440.
c. $24.
d. $428.

Answer 1

Answer:

$510

Explanation:

                                          units          cost             total

beginning inventory             8            $10               $80

purchases                            40           $12             $480

ending inventory                  5

                                                     FIFO ⇒ $12         $60

                                                     LIFO ⇒ $10         $50

                        average = $560 / 48 ⇒ $11.67    $58.33

under LIFO, the cost of goods sold = ($80 + $480 ) - $50 = $510