Piggly Wiggly Sales Had Six CD Players in Inventory on December

question 47

Multiple Choice

Piggly Wiggly Sales had six CD players in inventory on December 31. They were purchased in November for $170 each. A quoted price received from the supplier on December 31 shows the CD players now cost $175 each. Piggly Wiggly has marked each player to sell for $320. Using the lower-of-cost-and-net-realizable-value rule, the ending inventory of CD players should be shown at:

• A)$1,050.
• B)$1,920.
• C)$1,020.
• D)$900.

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Definitions:

Optimal Allocation

The most efficient distribution of resources in a manner that maximizes the net benefit received from their use.

Scarce Resources

Natural or economic resources that are limited in supply compared to the demand for them.

Long-run Equilibrium

Long-run equilibrium occurs when all firms in a market or industry are producing at their most efficient level, with no incentive to enter or exit the market.

Purely Competitive

A market structure characterized by many buyers and sellers, where each has negligible impact on market price.