Lee Industries Had the Following Inventory Transactions Occur During 2010

question 177

Multiple Choice

Lee Industries had the following inventory transactions occur during 2010: The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's after-tax income using FIFO? (rounded to whole dollars)

• A) $772
• B) $848
• C) $594
• D) $540

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Definitions:

Need

A requirement for something because it is essential or very important.

Drive-reduction Theory

A psychological motivation theory suggesting that the act of fulfilling basic physiological needs reduces drive and generates a state of psychological equilibrium or satisfaction.

Famine

A severe shortage of food resulting in widespread hunger, malnutrition, and increased mortality.

Arousal Theory

The theory suggesting that people are motivated to maintain an optimal level of arousal for their best performance.