Addison, Inc -The Inventory Data for an Item for November Are

question 116

Multiple Choice

Addison, Inc. uses a perpetual inventory system. The following is information about one inventory item for the month of September:
$\begin{array} { r l l } \text { Sept. } 1 & \text { Inventory } & 20 \text { units at } \$ 20 \\ 4 & \text { Sale } & 10 \text { units } \\ 10 & \text { Purchase } & 30 \text { units at } \$ 25 \\ 17 & \text { Sale } & 20 \text { units } \\ 30 & \text { Purchase } & 10 \text { units at } \$ 30 \end{array}$
-The inventory data for an item for November are:
$$\begin{array} { r l l } \text { Nov. } 1 & \text { Inventory } & 20 \text { units at } \$ 19 \\4 & \text { Sale } & 10 \text { units } \\10 & \text { Purchase } & 30 \text { units at } \$ 20 \\17 & \text { Sale } & 20 \text { units } \\30 & \text { Purchase } & 10 \text { units at } \$ 21\end{array}$$
Using a perpetual system, what is the cost of merchandise sold for November if the company uses FIFO?

• A) $610
• B) $600
• C) $590
• D) $580

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Definitions:

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific product, department, or segment of a business, enabling more accurate profitability analysis.

Common Fixed Expenses

Costs that do not vary with the level of production or sales and are shared across different parts of a business, such as corporate office expenses.

Divisional Segment Margin

A financial metric that measures the profit or loss generated by a specific division or business segment, assessing its contribution to the overall company performance.

Common Fixed Expenses

Expenses that do not vary with the level of production or sales, and are shared by more than one segment or department within an organization.