Romanoff Industries Had the Following Inventory Transactions Occur During 2015

question 62

Multiple Choice

Romanoff Industries had the following inventory transactions occur during 2015: The company sold 150 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using FIFO? (rounded to whole dollars)

• A)$3,318
• B)$3,552
• C)$6,948
• D)$7,182

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Definitions:

Fixed Expenses

are costs that do not change with the volume of production or sales, such as rent and salaries.

Sales

The transactions between a company and its customers where goods or services are provided in exchange for money.

Margin of Safety

The difference between actual sales and breakeven sales, indicating how much sales can decrease before a business incurs a loss.

Variable Expenses

Expenditures that fluctuate in tandem with operational activity levels, including costs like utilities and commissions.