Given the Following Information, Determine the Cost of Ending Inventory

question 15

Multiple Choice

Given the following information, determine the cost of ending inventory at June 30 using the LIFO perpetual inventory method. Assume this is the first month of the company's operations. June 1: 15 units were purchased at $20 per unit.
June 15: 12 units were sold.
June 29: 8 units were purchased for $25 per unit.

• A)$200
• B)$220
• C)$260
• D)$275
• E)$300

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Definitions:

Net Income

Net Income is the total earnings of a company after all expenses and taxes have been subtracted from total revenue, indicating profitability.

Contribution Margin Ratio

A measure that indicates the percentage of each sales dollar that contributes to covering fixed costs and generating profit.

Target Profit

The amount of net income that a company aims to achieve within a specific time frame.

Fixed Expenses

Costs that remain constant for a given period of time regardless of the level of production or business activity.