A Company Purchased Inventory as Follows: 200 Units at $5

question 63

Multiple Choice

A company purchased inventory as follows: 200 units at $5.00
300 units at $5.50
The average unit cost for inventory is

• A) $5.00.
• B) $5.25.
• C) $5.30.
• D) $5.50.

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Definitions:

Sales Salaries Expense

The total salary and wage expenses incurred for the sales staff of a company.

Manufacturing Overhead

includes all indirect costs related to manufacturing, such as salaries of supervisors and maintenance costs, that are not directly tied to a specific product.

Job-order Costing

A costing method used by companies to assign manufacturing costs to individual products or batches, ideal for customized orders.

Overhead Cost

A rephrased definition: Expenses related to the day-to-day running of a business that are not directly linked to any specific product or service, such as administrative expenses.