10_17 Solution

# 10_17 Solution - 400 doses were consumed after that date...

This preview shows page 1. Sign up to view the full content.

PROBLEM 10-17 SOLUTION (LIFO/FIFO) Units Price Consumption in Units Balance Left in Units FIFO LIFO FIFO LIFO Beginning bal. 1,000 \$17 1,000 400 0 600 Purchase Jan. 2 300 \$21 200 300 100 0 Purchase July 1 500 \$23 500 500 0 FIFO LIFO Expense Expense \$17,000 \$6,800 \$0 \$10,200 \$4,200 \$6,300 \$2,100 \$0 \$11,500 \$11,500 \$0 \$21,200 \$24,600 \$13,600 \$10,200 Note: Under LIFO 500 doses purchased on July 1 are assumed to have been used, even though only
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 400 doses were consumed after that date. This seems counter-intuitive. The key is that LIFO is a cost flow assumption used only to calculate inventory-related expense and ending inventory balances. It does not identify the specific inventory units that were actually consumed. FIFO Inventory Value LIFO Inventory Value...
View Full Document

## This note was uploaded on 02/22/2012 for the course FINANCE 390:300:03 taught by Professor Palmon during the Fall '10 term at Rutgers.

Ask a homework question - tutors are online