What is the gross profit using LIFO? (Remember, gross profit is equal to sales revenue less the cost of goods?

Posted: 19-08-2010 | Author: admin | Category: United States


The following information pertains to Karon’s Candy Shop:
Sales revenue 100 units at $15 per unit

Beginning inventory 40 units at $9 per unit

Purchases 80 units at $10 per unit

What is the gross profit using LIFO? (Remember, gross profit is equal to sales revenue less the cost of goods sold.)

a. $500

b. $520

c. $540

d. $1,500

e. none of the above

Category: United States by admin

One Response to “What is the gross profit using LIFO? (Remember, gross profit is equal to sales revenue less the cost of goods?”

  1. Snedz87, on August 20th, 2010 at 3:52 am Said:

    LIFO basis so purchases during period used first. Therefore of the 100 units sold 80 cost $10 each and 20 cost $9 each. So cost of goods sold is 80*10+20*9 = 980. Sales = 100*15 = 1500. Gross profit = 1500-980= $520. So the answer is b

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