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3) A firm has beginning inventory of 300 units at a cost of $11 each. Production during the period was 650 units at $12 each. If sales were 700 units, what is the value of the ending inventory using LIFO?
A. $3,300
B. $2,750
C. $3,250
D. $2,550

  • finance -

    LIFO = Last In First Out.

    Whatever you just bought, or made, is what you sell next.

    If I start with 5 units @$10,
    then buy 7 @$20,
    then sell 10,

    which 10 do I sell?

    I sell the _last_ 10 that I got, which will be the 7@$20 and 3 of the 5 @$10.

    That will leave me with the first two I bought, which I valued @ $10 each.

    Now look at your question again. Which 700 were sold? Which 250 were left?

  • finance -

    It is B. $2,750

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