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Inventory Valuation- LIFO, FIFO, average cost

Use the following information for questions 12 -15.
A company just starting business made the following four inventory purchases in June:
June 1 150 units $ 750
June 10 200 units 1,200
June 15 200 units 1,260
June 28 150 units 990
$4,200
A physical count of merchandise inventory on June 30 reveals that there are 250 units on hand.

12. Using the LIFO inventory method, the value of the ending inventory on
June 30 is
a. $1,350.
b. $1,620.
c. $2,580.
d. $2,850.

13. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is
a. $1,620.
b. $1,350.
c. $2,580.
d. $2,850.

14. Using the average cost method, the amount allocated to the ending inventory on June 30 is
a. $4,200.
b. $2,700.
c. $1,495.
d. $1,500.

15. The inventory method which results in the highest gross profit for June is
a. the FIFO method.
b. the LIFO method.
c. the weighted average unit cost method.
d. not determinable.

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Solution Preview

Use the following information for questions 12 -15.

A company just starting business made the following four inventory purchases in June:
June 1 150 units $ 750
June 10 200 units 1,200
June 15 200 units 1,260
June 28 150 units 990
...

Solution Summary

Answers 4 multiple choice questions on Inventory Valuation- LIFO, FIFO, average cost methods.

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