Question

Question 9
A company that sells flux capacitors uses LIFO for its inventory accounting. It had 100 flux capacitors in Inventory on 12/31/2011 with a total cost of $100,000. The company bought 50 flux capacitors costing $55,000 on 3/3/12; another 50 flux capacitors costing $65,000 on 6/6/12; and another 100 flux capacitors costing $140,000 on 9/9/12. During 2012, the company sold 150 flux capacitors. What was Cost of Goods Sold during 2012?


$100,000



$205,000



$155,000



$140,000



$180,000


1 point
10.
Question 10
Which of

Answer 1

To determine the Cost of Goods Sold (COGS) during 2012 using the LIFO (Last In, First Out) inventory accounting method, we'll need to account for the inventory movements and sales.

1. **Initial Inventory:** 100 flux capacitors at a total cost of $100,000 (Cost per unit: $1,000).
2. **Purchases:**
- 3/3/12: 50 flux capacitors at a total cost of $55,000 (Cost per unit: $1,100).
- 6/6/12: 50 flux capacitors at a total cost of $65,000 (Cost per unit: $1,300).
- 9/9/12: 100 flux capacitors at a total cost of $140,000 (Cost per unit: $1,400).

3. **Total Available Inventory at the end of 2012:**
- Initial Inventory: 100
- Purchases: 50 + 50 + 100 = 200
- Total available: 100 + 200 = 300 capacitors.

4. **Total Sold:** 150 flux capacitors.

**Using LIFO, the last items purchased are sold first.**

- The last purchase was on 9/9/12:
- Sell 100 capacitors from the 100 purchased at $1,400 each:
- COGS = 100 capacitors * $1,400 = **$140,000**.

- The next most recent purchase was on 6/6/12:
- Sell 50 capacitors from the 50 purchased at $1,300 each:
- COGS = 50 capacitors * $1,300 = **$65,000**.

5. **Total COGS for 2012:**
- COGS from 9/9/12 = $140,000
- COGS from 6/6/12 = $65,000
- Total COGS = $140,000 + $65,000 = **$205,000**.

Therefore, the Cost of Goods Sold during 2012 is **$205,000**.

The correct answer is:
**$205,000**.