What is the formula for wacc?
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Answer:
The value of inventory at Dollar value LIFO is $510,000
Explanation:
dollar-value LIFO method
This is one of the techniques use to integrate inventory items into pool and then valuation is applied on pool rater than on individual item
To calculate the dollar value of ending inventory
we must
Determine value of ending inventory
Determine the difference between ending inventory and beginning inventory at the price of previous year
Determine the difference between ending inventory and beginning inventory at the current price
Add beginning inventory and difference at the current price to get the value of ending inventory on the basis of dollar value LIFO method
The information related to inventory of the company for the current year is given as follows
Beginning inventory is $400,000
Base price index is 100
Ending inventory at current price index is $550,000
Current price index is 110
INVENTORY VALUE AT DOLLAR VALUE LIFO IS CALCULATED AS FOLLOWS
Ending inventory value at base price index = $
= $500,000
The increase in inventory at base price index is $500,000 - $400,000
= $100,000
The increase in inventory at current price index is $100,000 ×
= $110,000
Calculate inventory at end
inventory at end = inventory at the beginning + increase in inventory at current price
$400,000+$110,000
= $510,000
Therefore, value of inventory at Dollar value LIFO is $510,000