In its first month of operation, Kuhlman Company purchased 130 units of inventory for $6, then 230 units for $7, and finally 170 units for $8. At the end of the month, 200 units remained.

Question

Compute the amount of phantom profit that would result if the company used FIFO rather than LIFO.

Answer 1

under the fifo method

Unit sold 130*6+200*7= 2180

130 UNIT AT 6
200 UNIT AT 7