Ken's Hotel Heating and Ventilation Uses the Specific Identification Method

question 7

Multiple Choice

Ken's Hotel Heating and Ventilation uses the specific identification method of costing inventory.During March, Ken purchased three air conditioning units for $5,000, $6,000, and $8,000, respectively.During March, two units are sold for $8,500 each.Ken determines that at March 31, the $8,000 unit is still on hand.What is Ken's gross profit for March?

• A)$4,000
• B)$6,000
• C)$3,000
• D)$9,000

Understand the application of standard rates in overhead costing.

Recognize the importance of revising standards in response to organizational or environmental changes.

Understand the principles and applications of variable and standard costing systems.

Calculate and analyze sales price, sales volume, and overhead variances.

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Definitions:

Souvenirs

Items purchased or collected as reminders of a particular place, event, or experience, often associated with tourism.

Expected Profit

An estimate of the amount of profit that a business anticipates earning over a specific period, based on forecasts and assumptions about future conditions.

Optimal Number

The best or most efficient quantity to achieve a specific goal, often relating to production, inventory levels, or workforce sizing.

Souvenirs

Items purchased or obtained as a reminder of a particular place, event, or experience.