A company that sells flux capacitors uses LIFO for its inventory accounting. It had 100 flux capacitors in Inventory on 12/31/2011 with a total cost of $100,000. The company bought 50 flux capacitors costing $55,000 on 3/3/12; another 50 flux capacitors costing $65,000 on 6/6/12; and another 100 flux capacitors costing $140,000 on 9/9/12. During 2012, the company sold 150 flux capacitors. What was Cost of Goods Sold during 2012?
LIFO is last-in, first-out. So, COGS will include the costs of the last 150 flux capacitors. This would be the 100 bought on 9/9/12 and the 50 bought on 6/6/12: $140,000 + $65,000 = $205,000.
