12. identify the cost

Required information Costs are assigned to the Cost of Goods Sold account each time a sale occurs in a perpetual system. Specific identification assigns a cost to each item sold by referring to its actual cost (for example, its net invoice cost). Weighted average assigns a cost to items sold by dividing the current balance in the Inventory account by the total items available for sale to determine cost per unit. We then multiply the number of units sold by this cost per unit to get the cost of each sale. FIFO assigns cost to items sold assuming that the earliest units purchased are the first units sold. LIFO assigns cost to items sold assuming that the most recent units purchased are the first units sold. Knowledge Check 01 Assume that we use a perpetual inventory system and that five identical units are purchased at the following four dates and costs: April 5 April 10 April 15 April 20 April 22 $10 $12 $14 $16 $17 One unit is sold on April 25. The company uses the last-in, first-out (LIFO) inventory costing method. Identify the cost of the ending inventory on the balance sheet Cost of the ending inventory