- This topic has 1 reply, 2 voices, and was last updated 2 years ago by
Ken Garrett.
Ken Garrett.-
Posts
-
diebish
- Topics: 1
- Replies: 0
- ☆
Receipts and issues of a raw material for a period were:
Units $ per unit Cumulative total $
Day 1 Balance 160 3.70 592
Day 3 Receipt 230 3.60 1,420
Day 5 Issue 110
Day 8 Issue 150Using the LIFO inventory pricing method, what is the total cost of the issue on Day 8?
$545
$555
$540
$543
cant get it someone Please help
Ken Garrett
- Topics: 10
- Replies: 10134
- ☆☆☆☆☆
LIFO: so last in first out.
At the end of Day 3 there are
160 units costing 3.70
230 units costing 3.60The day 5 issue assumes that the 110 removed come from the Day 3 receipt (LIFO). Therefore we are left with:
160 units costing 3.7
120 units costing 3.6The day 8 issue of 150 will first use the 120 remaining from Day 3 then will use 30 from the opening balance. Therefore, the cost of the issue is
120 x 3.6 + 30 x 3.7 = $543
Ken Garrett- You must be logged in to reply to this topic.