Accessibility: Keyboard Navigation
Blooms: ApplyDifficulty: HardLearn
in
g Objective: 07-03 Compute costs usin
g three in
ven
tory costin
g methods.
Topic: 07-04 Cost of Goods Sold Equation
72. The Acme Corporation buys 300 units of merchandise in January at $5 each. Acme buys 500 units at $4 each in February and 200 units at $6 each in March. Acme sells 150 units during this quarter. Acme uses the LIFO Method. What is its cost of goods sold for the quarter?A.$600B.$934C.$750D.$900 Accessibility: Keyboard Navigation
Blooms: ApplyDifficulty: MediumLearn
in
g Objective: 07-S1 Compute in
ven
tory costs usin
g LIFO.
Topic: 07-11 In
ven
tory Costin
g Methods 73. The Acme Corporation buys 300 units of merchandise in January at $5 each. Acme buys 500 units at $4 each in February and 200 units at $6 each in March.Acme sells 300 units during this quarter. Acme uses the LIFO method. What is its cost of goods sold for the quarter?A.$1,600B.$1,400C.$1,500D.$1,800 Goods sold are assumed to have come from the 300 most recent units purchased. COGS = (200 units * $6 per unit) - (100 units * $4 per unit) = $1,600. Accessibility: Keyboard Navigation
Blooms: ApplyDifficulty: MediumLearn
in
g Objective: 07-S1 Compute in
ven
tory costs usin
g LIFO.
Topic: 07-11 In
ven
tory Costin
g Methods
74. The Acme Corporation buys 300 units of merchandise in January at $5 each. Acme buys 500 units at $4 each in February and 200 units at $6 each in March.Acme sells 150 units during this quarter. Acme uses the weighted average method. What is its cost of goods sold for the quarter?A.$600B.$705C.$750D.$900 Average cost/unit = [(300 * $5/unit) + (500 * $4/unit) + (200 * $6/unit)]/(300 + 500 + 200) = ($1,500 + $2,000 + $1,200)/1,000 units = $4.70/unit COGS = 150 units * $4.70/unit COGS = $705. Accessibility: Keyboard Navigation
Blooms: ApplyDifficulty: HardLearn
in
g Objective: 07-03 Compute costs usin
g three in
ven
tory costin
g methods.
Topic: 07-05 In
ven
tory Costin
g Methods 75. The Acme Corporation buys 300 units of merchandise in January at $5 each. Acme buys 500 units at $4 each in February and 200 units at $6 each in March.Which of the following statements is true?A.Whether unit costs are steadily rising or falling, the weighted average cost method always yields a cost of goods sold between that of FIFO and LIFO.B.FIFO will lead to the highest net income if unit costs are falling.C.LIFO will always yield a smaller net income than FIFO.D.Specific identification is the most practical, but least accurate, measure of cost and net income. Accessibility: Keyboard Navigation
Blooms: Un
derstan
dDifficulty: MediumLearn
in
g Objective: 07-03 Compute costs usin
g three in
ven
tory costin
g methods.
Learn
in
g Objective: 07-S2 Compute in
ven
tory costs in
perpetual systems.
Topic: 07-05 In
ven
tory Costin
g MethodsTopic: 07-13 FIFO, LIFO, an
d Weighted Average in
a Perpetual In
ven
tory System
Want to read all 127 pages?
Previewing 69 of 127 pages Upload your study docs or become a member.
Want to read all 127 pages?
Previewing 69 of 127 pages Upload your study docs or become a member.
End of preview
Want to read all 127 pages? Upload your study docs or become a member.