Florida Inc Uses a Periodic Inventory System with the Weighted

question 22

Multiple Choice

Florida Inc uses a periodic inventory system with the weighted average method of cost assignment.The following data are available.
Date Units Unit Cost Total
Cost
Beginning inventory Jan 1 2000 $6 $12 000
Purchase Mar 13 4000 $7 $28 000
Purchase June 20 6000 $8 $48 000
Ending inventory Dec 31 1000
The cost of the ending inventory to the nearest dollar is:

• A)$8333.
• B)$8000.
• C)$7300.
• D)$6000.

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a unit of product.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a unit of product.

Inventory

Items held for sale in the ordinary course of business, as well as supplies and materials used in producing goods for sale.

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.