Given the Following Data, What Is the Gross Margin If

question 62

Multiple Choice

Given the following data, what is the gross margin if cost of goods sold is determined using the FIFO periodic method? $\begin{array} { | l | l | } \hline \text { Sales revenue } & 200 \text { units at } \$ 20 \text { per unit } \\\hline \text { Beginning inventory } & 60 \text { units at } \$ 12 \text { per unit } \\\hline \text { Purchases } & 210 \text { units at } \$ 13 \text { per unit } \\\hline\end{array}$

• A)$2,540
• B)$1,460
• C)$1,400
• D)$1,390

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Definitions:

Relevant Cost

Costs that differ between alternatives in a decision-making process, and therefore, should be considered when evaluating those alternatives.

Avoidable Costs

Expenses that can be eliminated if a particular decision is made, such as discontinuing a product or service.

Sunk Costs

Costs that have already been incurred and cannot be recovered or changed.

Business Segment

A division within a company that generates its own revenue and expenses, often focusing on a specific product or market.