[idmedesigns]

Okay, starting to understand FIFO, need to understand LIFO. I have a problem which states this:

Began 2008 with 1,200 toys which cost $9 each. During year made following purchases:

Date Units Purchased Cost per Unit Total cost

3/18 500 $9.50 4,750
6/4 700 10.00 7,000
8/28 400 10.50 4,200
11/13 900 11.50 10,350
TOTAL 2500 26,300
Year end inventory is 800 units on Dec 31, 08. WHat is cost of goods sold?
I know I add 1200 + 2500 =3700. I subtract 3700-800=2900. I'm confused, 2700 is more than all my units purchsed. Do I use all my total cost for each units purchased and add the extra 400 onto 3/18 at 500/units purchased? I'm confused can I get some help Please?

[morgaine300]

You're making it complicated.

You purchased 3700 units. Did you not purchase those that were in beginning inventory? Why do you think you were supposed to add the 1200 to the 2500 to begin with?

Stick the beginning inventory at the top of the list and stick 1/1 on it. Then change your totals to 3700 units and $37,100 cost. So there isn't any "extra 400" units.

Can you get it with that little problem straightened out?

[rehmanvohra]

Under FIFO method, the ending inventory is from the latest purchases and under LIFO it is from the opening inventory. You can do the rest