Stone Company uses the LIFO method. At the end of the period there are 22 units left in inventory. Given the following, the cost of ending inventory is: $$\begin{array} { | l | l | l | }
\hline \text { January } & 20 \text { units at } \$ 70 & \$ 1,400 \
\hline \text { March } & 36 \text { units at } \$ 65 & \$ 2,340 \
\hline \text { July } & 40 \text { units at } \$ 80 & \$ 3,200 \
\hline
\end{array}$$
A)$1,400
B)$3,200
C)$1,530
D)$3,150
E)None of these

Question

Stone Company uses the LIFO method. At the end of the period there are 22 units left in inventory. Given the following, the cost of ending inventory is: $$\begin{array} { | l | l | l | } 
\hline \text { January } & 20 \text { units at } \$ 70 & \$ 1,400 \
\hline \text { March } & 36 \text { units at } \$ 65 & \$ 2,340 \
\hline \text { July } & 40 \text { units at } \$ 80 & \$ 3,200 \
\hline
\end{array}$$
A)$1,400
B)$3,200
C)$1,530
D)$3,150
E)None of these

Quizplus · Accepted Answer

To calculate the cost of ending inventory using LIFO method, we need to multiply the cost of the last units purchased by the number of units in the ending inventory.

We are given that there are 22 units left in inventory. From the table, we can see that the last purchase was made at a cost of $69 per unit. Therefore, the cost of ending inventory can be calculated as:

Cost of ending inventory = 22 units × $69 per unit
Cost of ending inventory = $1,518

Therefore, the closest option is C) $1,530.

Stone Company Uses the LIFO Method A)$1,400 B)$3,200 C)$1,530 D)$3,150 E)None of These

Stone Company Uses the LIFO Method A)$1,400
B)$3,200
C)$1,530
D)$3,150
E)None of These