The Boxwood Company sells blankets for $38.00 each. The following was taken from

Question

The Boxwood Company sells blankets for $38.00 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1 Date May 03Purchase May 10 Sale May 17Purchase May 20 Sale May 23 Sale May 30 Purchase Blankets Units Cost $16.00 14 $18.00 $21.00 Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May using the LIFO inventory cost method. Select the correct answer. $483.00 $174.00 $585.00 $411.00

Explanation / Answer

1) Calculate ending inventory under LIFO perpetual method:

Ending inventory = (6*16+7*18+9*21) = 411

So answer is d) $411

2) Units available for sale = 10+25+30+15 = 80 Units

Ending inventory units = 80-60 = 20 Units

Ending inventory value under FIFO periodic method = (15*70+5*65) = 1375

So answer is b) $1375

3) Ending inventory value under LIFO periodic method = (10*55+10*60) = 1150

So answer is b) $1150

4) Cost of goods available for sale = (550+1500+1950+1050) = 5050

Average cost per unit = 5050/80 = 63.125

Ending inventory under average cost method = 63.125*20 = 1263

So answer is b) $1263

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