A company had the following purchases during the current year: On December 31, there were 26 units remaining in ending inventory. Using the LIFO inventory valuation method, what is the cost of the ending inventory? $3,280. $3,200. $3,445. $3,540. $3,640. Solution In LIFO Valuation method, most recent stock are cleared for sale or consumption and the ending inventory will consist of first purchases. So LIFO stock of 26 units will consist of 10 units of January and 16 units of February Cost of ending inventory = 10 * 120 + 16 * 125 = 1200 + 2000 = $3200 Hence the correct answer is B .