Figure 7-4
the Following Information Pertains to Stark Ltd -Refer to Figure 7-4

question 42

Multiple Choice

Figure 7-4
The following information pertains to Stark Ltd.:
$$\begin{array} { l r } \text { Beginning inventory } & 0 \text { units } \\\text { Ending inventory } & 5,000 \text { units } \\\text { Direct labour per unit } & £ 20 \\\text { Direct materials per unit } & 16 \\\text { Variable overhead per unit } & 4 \\\text { Fixed overhead per unit } & 10 \\\text { Variable selling costs per unit } & 12 \\\text { Fixed selling costs per unit } & 16\end{array}$$
-Refer to Figure 7-4. What is the value of ending inventory using the absorption costing method?

• A)£310,000
• B)£250,000
• C)£200,000
• D)£390,000

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Definitions:

Inventory Turnover

A measure of how frequently a company sells and replaces its stock of goods during a certain period. It indicates the efficiency of inventory management.

Cash Inflows

Money that is received by a company from its various business activities, including sales, financing, or investments.

Operating Cash Flow

Operating Cash Flow refers to the cash generated from a company’s normal business operations, indicating whether a company is able to generate sufficient positive cash flow to maintain and grow its operations.

Long-term Solvency

A measure of a company's ability to meet its long-term financial obligations, indicating its financial health and stability over time.