Question
Similar to the example of FIFO and LIFO inventory accounting methods in the text, a college store purchased sweatshirts for the upcoming fall semester. Using the following data, where a total of 100 sweatshirts were purchased by the store and placed in inventory, select the correct statement from the following choices.
Inventory Purchase Date 8/1 50 sweatshirts Inventory Purchase Date 9/1 50 sweatshirts
Cost Per Sweatshirt $12.00 Cost per Sweatshirt $14.00
Selling Price $28.00 Selling Price $28.00
Total Sweatshirts sold from 8/1 – 12/31 = 50 sweatshirts
Inventory Purchase Date 8/1 50 sweatshirts Inventory Purchase Date 9/1 50 sweatshirts
Cost Per Sweatshirt $12.00 Cost per Sweatshirt $14.00
Selling Price $28.00 Selling Price $28.00
Total Sweatshirts sold from 8/1 – 12/31 = 50 sweatshirts
A LIFO or FIFO will produce the same amount of profit.
B FIFO would provide the least profit.
C FIFO would provide the most profit.
D LIFO would provide the most profit.
This question is taken from Business 1 – Introduction to Business » Spring 2020 » Chapter 17 Quiz
