A Firm Purchased 25 Units of Materials with a Unit

question 8

Multiple Choice

A firm purchased 25 units of materials with a unit price of $2.00 on May 5.On May 15,the firm purchased 25 units with a unit price of $2.10.If the firm uses the FIFO method of inventory pricing,the total cost of 30 units issued on May 20 would be

• A) $62.50.
• B) $60.00.
• C) $63.00.
• D) $60.50.

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Definitions:

Direct Labor

The expenses related to the salaries of workers who are actively engaged in creating products or providing services.

Direct Materials

Raw materials that are directly involved in the production of a product and can be easily traced to it.

Cost Pool

A collection of indirect costs grouped together based on similar cost drivers for the purpose of allocation to products, services, or departments.

Activity-Based Costing

A costing methodology that assigns costs to products and services based on the activities and resources that go into producing them.