Answer:Using LIFO, gross profit on 18 units sold is $562
Explanation: The Last In, First Out (LIFO) inventory costing method is one which assumes goods brought in most recently are sold first, then the one after that, and so on. It is demonstrated as follows:
The 18 units sold would be costed as
6 units bought on Nov. 6 @ $25, amounting to $150
10 units bought on Nov. 2 @ $22, amounting to $220
2 units bought on Nov. 1 @ $20, amounting to $40
Gross profit = Sales revenue - cost of goods sold
Sales revenue = 18 units × $54 = $972
Cost of goods sold = $150 + $220 + $40 = $410
Therefore, gross profit will be
$972 - $410 = $562
