Question

A company starts out with 800 units if a particular item in inventory.Assume that their cost is $10 ach. Over the next three months it buys 100 more units
at $11 each,and then 50 more units at $12 each. It sold 200 units during that three months, and it uses the Last In First Out method, you would assume that all of the remaining units should e valued at ----each. a. $10 b. $11. c. $12. d. none of the above answers is correct because you must average the various purchase prices to find the amount to apply to the ending inventory

Answer 1

800 units at $10 = $8000
100 units at $11 = $ 1100
50 units at $ 12 = $ 600

so it bought 950 units at $9700

sold 200 --- (950 - 200) = 750 --- (750 remaining units)

if last in first out method is used, all of the $12 units are used and all of the $11 units are used....and 50 of the $10 units are used....leaving remaining units left be the $10 units

Answer 2

yeah, if anything remains, its assumed to be the oldest stock ... which is at 10$