Calculating ending inventory and gross profit in LIFO

Jerrico Wallboard Co. had a beginning inventory of 7,000 units on January 1, 2004.

The costs associated with the inventory were:

Material $9.00 unit
Labor 5.00 unit
Overhead 4.10 unit

During 2004, Jerrico produced 28,500 units with the following costs:

Material $11.50 unit
Labor 4.80 unit
Overhead 6.20 unit

Sales for the year were 31,500 units at $29.60 each. Jerrico uses LIFO
accounting. What was the gross profit? What was the value of ending inventory?

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Solution Summary

The solution explains calculation of ending inventory and gross profit in LIFO inventory system