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? Note: LIFO, last-in, first-out represents that the last produced will be the first shipped. (Show your work/calculations/formulas)
Beg. Inventory---300 units---11 ea--$3300
Produced---------650 units---12 ea--$7800
Total------------950 units--------$11,100
SOLD--LIFO (Last-in-first-out)
From Beg. Inv----50 units--11 ea---$550
From Produced---650 units--12 ea--$7800
Total-----------700 units---------$8350
Ending Inventory
Beg. Inv Left--250 units---11 ea--$2750
Produced Left----0 units---12 ea---$0
Total Ending Inventory------------$2750
Hope this lines up that you can read this.
Sure, let's calculate the value of the ending inventory using LIFO.
First, we need to determine the units sold during the period. Since we started with 300 units in beginning inventory and produced an additional 650 units, the total available units for sale were 300 + 650 = 950 units.
Next, we subtract the units sold from the total available units to find the ending inventory. Since we sold 700 units, the ending inventory would be 950 - 700 = 250 units.
Now, let's calculate the value of the ending inventory using LIFO. Since LIFO assumes that the last units produced will be the first shipped, let's consider the costs accordingly.
The last units produced were the 650 units at $12 each. So, the value of the ending inventory using LIFO would be 250 units x $12 per unit = $<<250*12=3000>>3000.
Therefore, the value of the ending inventory using LIFO would be $3000.
To determine the value of the ending inventory using the LIFO (Last-In, First-Out) method, we need to calculate the cost of the ending inventory by considering the units sold from the most recent production.
Given information:
Beginning inventory: 300 units at a cost of $11 each
Production: 650 units at a cost of $12 each
Sales: 700 units
Step 1: Calculate the cost of goods available for sale.
Cost of beginning inventory = 300 units * $11 = $3300
Cost of production = 650 units * $12 = $7800
Cost of goods available for sale = $3300 + $7800 = $11100
Step 2: Determine the cost of goods sold.
Since we are using the LIFO method, we assume that the most recently produced units are sold first. Therefore, we need to calculate the cost of goods sold using the units sold from the most recent production.
Cost of goods sold = Units sold * Cost per unit from the most recent production
Cost per unit from the most recent production = $12 (as the last produced units were at $12 each)
Cost of goods sold = 700 units * $12 = $8400
Step 3: Calculate the value of the ending inventory.
Value of ending inventory = Cost of goods available for sale - Cost of goods sold
Value of ending inventory = $11100 - $8400 = $2700
Therefore, the value of the ending inventory using the LIFO method is $2700.
To calculate the value of the ending inventory using LIFO (Last-In, First-Out) method, we need to determine which units were sold first based on the sales quantity and calculate the remaining inventory value.
Here's how we can calculate the ending inventory value using LIFO:
1. Calculate the cost of goods sold (COGS):
To determine the cost of goods sold, we need to know which units were sold first. Based on the LIFO method, the last units purchased or produced are considered as sold first.
Sales = 700 units
We know the following:
- Beginning inventory: 300 units at a cost of $11 each
- Production during the period: 650 units at a cost of $12 each
First, we need to determine the number of units sold from the beginning inventory:
Sold from beginning inventory = min(Sales, Beginning inventory)
Sold from beginning inventory = min(700, 300) = 300 units
Next, we need to determine the number of units sold from production during the period:
Sold from production = min(Sales - Sold from beginning inventory, Production)
Sold from production = min(700 - 300, 650) = min(400, 650) = 400 units
Now, let's calculate the cost of goods sold (COGS) for the 700 units sold:
COGS = (Sold from beginning inventory * Cost per unit) + (Sold from production * Cost per unit)
COGS = (300 * $11) + (400 * $12)
COGS = $3300 + $4800
COGS = $8100
2. Calculate the ending inventory value:
To calculate the value of the ending inventory using LIFO, we need to subtract the units sold from the total inventory quantity and multiply the remaining units by their respective costs.
Ending inventory quantity = Beginning inventory + Production during the period - Sold from beginning inventory - Sold from production
Ending inventory quantity = 300 + 650 - 300 - 400
Ending inventory quantity = 250 units
Now, let's calculate the value of the ending inventory:
Ending inventory value = Ending inventory quantity * Cost per unit
Ending inventory value = 250 * $12
Ending inventory value = $3000
Therefore, the value of the ending inventory using LIFO is $3000.