Refer to the Information Provided in Figure 24

question 180

Multiple Choice

Refer to the information provided in Figure 24.5 below to answer the question(s) that follow. Figure 24.5
-Refer to Figure 24.5. At aggregate output of $2,400 billion, unplanned inventories equal $________ billion.

• A) -800
• B) -400
• C) 200
• D) 800

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Definitions:

Gross Price Method

An inventory valuation method that records purchases at the gross invoice price without deducting any cash discounts.

FIFO

FIFO (First-In, First-Out) is an inventory cost valuation method assuming that the oldest items of inventory are sold first and newer inventories last, affecting the cost of goods sold and ending inventory valuation.

LIFO

Last In, First Out, an inventory valuation method that assumes goods purchased last are the first to be used or sold, affecting cost of goods sold and inventory value.

Average

A statistical measure that denotes the central value of a set of numbers.