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EliteCraft Manufacturing has the following inventory purchases and sales during the month of March:March 1: Beginning inventory of 150 units at $11 eachMarch 8: Purchase of 250 units at $13 eachMarch 12: Sale of 300 unitsMarch 18: Purchase of 200 units at $14 eachMarch 25: Sale of 150 unitsCalculate the ending inventory and cost of goods sold (COGS) using the LIFO method.Question 22Answera.Ending inventory: $1,500; Total COGS: $5,900b.Ending inventory: $2,100; Total COGS: $6,000c.Ending inventory: $1,000; Total COGS: $5,000d.Ending inventory: $1,100; Total COGS: $5,900

Question

EliteCraft Manufacturing has the following inventory purchases and sales during the month of March:March 1: Beginning inventory of 150 units at 11eachMarch8:Purchaseof250unitsat11 eachMarch 8: Purchase of 250 units at 13 eachMarch 12: Sale of 300 unitsMarch 18: Purchase of 200 units at 14eachMarch25:Saleof150unitsCalculatetheendinginventoryandcostofgoodssold(COGS)usingtheLIFOmethod.Question22Answera.Endinginventory:14 eachMarch 25: Sale of 150 unitsCalculate the ending inventory and cost of goods sold (COGS) using the LIFO method.Question 22Answera.Ending inventory: 1,500; Total COGS: 5,900b.Endinginventory:5,900b.Ending inventory: 2,100; Total COGS: 6,000c.Endinginventory:6,000c.Ending inventory: 1,000; Total COGS: 5,000d.Endinginventory:5,000d.Ending inventory: 1,100; Total COGS: $5,900

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Solution

To calculate the ending inventory and cost of goods sold (COGS) using the LIFO (Last-In, First-Out) method, we start by tracking the inventory purchases and sales.

  1. March 1: Beginning inventory of 150 units at 11each=11 each = 1,650
  2. March 8: Purchase of 250 units at 13each=13 each = 3,250
  3. March 12: Sale of 300 units. According to LIFO, we sell the items we bought last first. So, we sell 250 units bought on March 8 and 50 units from the beginning inventory. This equals to (250*13)+(50∗13) + (50*11) = 3,250+3,250 + 550 = $3,800 (COGS)
  4. March 18: Purchase of 200 units at 14each=14 each = 2,800
  5. March 25: Sale of 150 units. Again, according to LIFO, we sell the items we bought last first. So, we sell 150 units bought on March 18. This equals to 150*14=14 = 2,100 (COGS)

Now, let's calculate the ending inventory and total COGS:

Ending inventory = Beginning inventory + Purchases - COGS Ending inventory = 1,650+1,650 + 3,250 + 2,800−2,800 - 3,800 - 2,100=2,100 = 1,800

Total COGS = COGS on March 12 + COGS on March 25 = 3,800+3,800 + 2,100 = $5,900

So, the answer is: Ending inventory: 1,800;TotalCOGS:1,800; Total COGS: 5,900. However, this option is not listed in the choices provided. Please check the calculations or the options provided.

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