Beginning Inventory, Purchases, and Sales for an Inventory Item Are

question 122

Essay

Beginning inventory, purchases, and sales for an inventory item are as follows:? $\begin{array}{llllll}\text { Sept. } &1 \text { Beginning inventory }&&24~ units& @ ~\$ 10\\&5 \text { Sale } &&17~ units\\&17 \text { Purchase } &&10 ~units& @ ~\$ 15\\&30 \text { Sale }&&~~8~ units\end{array}$ Assuming a perpetual inventory system and the last-in, first-out method, determine
(a) the cost of the merchandise sold for the September 30 sale and
(b) the inventory on September 30.

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Definitions:

Fixed Costs

Regular expenses that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.

Capacity

The maximum amount or number that something can contain or accommodate.

Variable Costs

Costs that change in proportion to the level of production or sales volume.

Fixed Costs

Costs that do not vary with the level of output or activity, remaining constant over a period.