Paxton Ltd had 200 units of one of its products, product Z, in stock on 1...

 

Transcribed Image Text:

Paxton Ltd had 200 units of one of its products, product Z, in stock on 1 May. These had cost £12 each. On 15 May 600 units were purchased from the supplier at a unit cost of £17, followed the next week by a further 100 units costing £18. The only sale made in the month occurred on 25 May, when 500 units were sold for £25 each. Assuming that the company uses the LIFO method of inventory pricing, what would be the gross profit reported for the month? Paxton Ltd had 200 units of one of its products, product Z, in stock on 1 May. These had cost £12 each. On 15 May 600 units were purchased from the supplier at a unit cost of £17, followed the next week by a further 100 units costing £18. The only sale made in the month occurred on 25 May, when 500 units were sold for £25 each. Assuming that the company uses the LIFO method of inventory pricing, what would be the gross profit reported for the month?

Answer rating: 100% (QA)

Using the LIFO method we assume that the most recent inventory purchases ar... View the full answer