Grays Company Has Inventory of 10 Units at a Cost

question 34

Multiple Choice

Grays Company has inventory of 10 units at a cost of $10 each on August 1.On August 3,it purchased 20 units at $12 each.12 units are sold on August 6.Using the FIFO perpetual inventory method,what amount will be reported in cost of goods sold for the 12 units that were sold?

• A)$120.
• B)$124.
• C)$128.
• D)$130.
• E)$140.

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Definitions:

Coase Theorem

A principle asserting that if property rights exist, and are transferable, externalities can be fully corrected through bargaining without government intervention.

Pollution Damage

The detrimental effects on the environment, human health, or property caused by pollutants and waste emissions from industrial, agricultural, or residential sources.

Bargaining

The process of negotiating the terms of a deal or agreement between parties with the aim of reaching a mutually acceptable outcome.

Marginal Social Cost

The additional cost society bears for the production of one more unit of a good or service.