A company purchased 200 units for $40 each on January 31. It purchased 165 units for $50 each on February 28. It sold 225 units for $65 each from March 1 through December 31. If the company uses the last-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)
A) $10,650
B) $8,250
C) $8,000
D) $16,250
A) $10,650
Number of units sold = 225 units of which 165 units were purchased on Feb. 28 at $50 per unit and 60 units were purchased on Jan. 31 at $40 per unit.
Cost of Goods Sold = (165 units x $50)+(60 units x $40) = $8,250+$2,400=$10,650
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