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Question

apps/assessment/take/launch.jsp?course assessment id- 3102 01 1&course; id- 149355.1&content; id 6119841 18step-n QUESTION 3 The Question is worth 7 total points Attach work to question #12 The beginning inventory balance was $650,000 The detail was as follows 1200 units $45O/unit 200 units $550/unit During the month the following purchases happenod 1000 units $560/unit 100 units @ $600/unit 500 units @ $520/unit The company sold 1,500 units during the month, how much COGS would the company expense if they used the LIFO method2 $702,000 $706,000 $824,000

Explanation / Answer

Solution:

Total unit sold during the month = 1500 units

Under LIFO units purchased last will be considered as sold first.

Therefore 1500 units sold consist - 500 units at $520 per unit, 100 units at $600 per unit and 900 units at $560 per unit

Cost of goods sold = (500*$520) + (100*$600) + (900*$560) = $824,000

Hence 3rd option is the right choice.

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