A Company Had 14 Units of Inventory at a Cost

question 24

Multiple Choice

A company had 14 units of inventory at a cost of $18 each on July 1. On July 2, the company purchased 19 units at $19 each. On July 6, the company purchased 15 units at $20 each. On July 8, the company sold 36 units for $63 each. Given this information, determine the cost of the 36 units sold using the LIFO periodic inventory method.

• A)$673
• B)$697
• C)$720
• D)$772
• E)$949

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Definitions:

Equivalent Units

A concept in costing that converts partially completed goods into a number of completed units, facilitating cost calculation.

Conversion Costs

Costs that are incurred to convert raw materials into finished goods, typically including direct labor and manufacturing overhead.

Work in Process

Refers to the cost of unfinished goods in manufacturing at a specific point in time, including labor, raw materials, and overhead.

Materials Costs

The direct costs associated with the raw materials used in the production of goods.