Sprint Shoes Inc. had a beginning inventory of 9,250 units on January 1, 20X1. The costs associated with the inventory were:   The Sprint Shoes Inc. produces a product with the following costs as of July 1, 20X1:       Material $15.00 per unit Labor 8.00 per unit Overhead 7.10 per unit   During 20X1, the firm produced 43,000 units with the following costs:       Material $17.50 per unit Labor 8.80 per unit Overhead 10.30 per unit   Sales for the year were 47,350 units at $44.60 each. Sprint Shoes uses LIFO accounting.   a. What was the gross profit?    b. What was the value of ending inventory?

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.