There Are Two Units of an Inventory Item in Stock

question 5

Multiple Choice

There are two units of an inventory item in stock. The selling price is $400 and the value is $400. What is the individual cost of the item -

• A) $100
• B) $200
• C) $300
• D) $400

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Definitions:

Budgeted Units

The quantity of products or services that a company plans to sell during a certain period, as determined in the budgeting process.

Inventory

The total amount of goods and materials held by a company to be sold or used in production.

Budgeted Finished Goods

An estimate of the finished goods a company plans to produce over a certain period as part of its budgeting process.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.