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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

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