At May 1, 2015, Kibbee Company Had Beginning Inventory Consisting

question 141

Multiple Choice

At May 1, 2015, Kibbee Company had beginning inventory consisting of 200 units with a unit cost of $7. During May, the company purchased inventory as follows: 800 units at $7
600 units at $8
The company sold 1,000 units during the month for $12 per unit. Kibbee uses the average cost method. Kibbee's gross profit for the month of May is

• A) $4,625.
• B) $4,571.
• C) $4,000.
• D) $4,500.

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Definitions:

Discounting

The process of determining the present value of a payment or a series of payments that will be made in the future.

Maturity Value

The amount payable to the investor at the end of a debt instrument's holding period or term.

Compounded Monthly

interest earned or paid is calculated and added to the account balance every month.

Promissory Note

A written promise to pay a specified amount of money to a certain individual or entity at a specified time or on demand.