A Company Just Starting Business Made the Following Four Inventory

question 230

Multiple Choice

A company just starting business made the following four inventory purchases in June: A physical count of merchandise inventory on June 30 reveals that there are 100 units on hand. The inventory method which results in the highest gross profit for June is

• A) the FIFO method.
• B) the specific identification method.
• C) the average-cost method.
• D) not determinable.

---

Definitions:

Spoilage Index

A measure used to evaluate the extent to which perishable goods may deteriorate or lose quality over a period.

Product Life Cycle

The progression of a product through four stages: introduction, growth, maturity, and decline.

Expiration Date

The date after which a product, such as food or medicine, is no longer considered safe or effective to use.

Decline Stage

The final phase in the product life cycle characterized by a decrease in sales and profits, leading to the eventual withdrawal of the product from the market.