A Corporation Uses a FIFO Perpetual Inventory System

question 102

Multiple Choice

A corporation uses a FIFO perpetual inventory system. August 2, 25 units were purchased at $12 per unit.
August 5, 10 units were purchased at $13 per unit.
August 15, 12 units were sold at $25 per unit.
August 18, 15 units were purchased at $14 per unit.
What was the amount of the ending inventory for the month of August?

• A)$496.00
• B)$486.00
• C)$492.57
• D)$300.00
• E)$510.00

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Definitions:

Diversification

The strategy of spreading investments among different financial instruments, industries, or other categories to reduce risk.

Portfolio Risk

Describes the uncertainty or variability of returns associated with a portfolio of investments, highlighting the combined risk of individual assets.

Systematic Risk

The risk inherent to the entire market or an entire market segment, which cannot be mitigated through diversification.

Asset Specific Risk

The risk of loss associated with a particular asset, different from market risk.