Lauer Corporation uses the periodic inventory system and has provided the following information about one of its laptop computers:

Date

1/1

5/5

8/10

10/15

Transaction

Beginning Inventory

Purchase

Purchase

Purchase

Number of units

100

200

300

200

Cost per unit

$800

$900

$1000

$1,100

During the year, Lauer sold 750 laptop computers.

What was cost of goods sold using the LIFO cost ow assumption?

A. $725,000.

B. $740,000.

C. $735,000.

D. $720,000.

Answer: Option (B) is correct.

Step-by-step explanation:

Given that,

Total laptop sold = 750

Since LIFO method is used, the sales shall be out of the inventories latest.

Therefore, 750 laptops shall be sold out of the following purchases:

October:

Total = Number of units * cost per unit

= 200 * $1,100

= $220,000

August:

Total = Number of units * cost per unit

= 300 * $1000

= $300,000

May:

Total = Number of units * cost per unit

= 200 * $900

= $180,000

January:

Total = Number of units * cost per unit

= 50 * $800

= $40,000

Cost of goods sold = October + August + May + January

= $220,000 + $300,000 + $180,000 + $40,000

= $740,000