Elly Company Uses a Periodic Inventory System An End of the Month (1/31/16) Inventory Showed That 150

question 128

Multiple Choice

Elly Company uses a periodic inventory system. Details for the inventory account for the month of January 2016 are as follows: $$\begin{array} { l c c r } & \text { Units } & \text { Per unit price } & \text { Total } \\\hline\text { Balance, } 1 / 1 / 16 & 200 & \$ 5.00 & \$ 1,000 \\\text { Purchase, } 1 / 15 / 16 & 100 & 5.30 & 530 \\\text { Purchase, } 1 / 28 / 16 & 100 & 5.50 & 550\end{array}$$ An end of the month (1/31/16) inventory showed that 150 units were on hand. If the company uses LIFO what is the value of the ending inventory?

• A) $750
• B) $805
• C) $850
• D) $815

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Definitions:

Firm

A business entity involved in commercial, industrial, or professional activities, whether incorporated or not.

Machine Maintenance

The routine or periodic upkeep and repairs of machinery to ensure its optimal functioning and prevent breakdowns.

Relevant Range

The range of activity or volume over which the assumptions about cost behavior are valid.

Cost Driver

Any factor which causes a change in the cost of an activity, influencing the costs of business operations directly.