Singh Computer Shop Begins Operations on June 1 and Uses

question 121

Multiple Choice

Singh Computer Shop begins operations on June 1 and uses a perpetual inventory system. During June, the company had the following purchases and sales for its Model 10 Fastback Computer System:
-Using the average cost formula, the amount allocated to the ending inventory on June 30 is

• A) $19,323.
• B) $14,538.
• C) $19,927.
• D) $10,600.

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Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of ending inventory and the cost of goods sold based on the weighted average of all costs of goods available for sale.

Conversion Costs

Costs incurred in the process of converting raw materials into finished products, typically including labor and overhead expenses.

Weighted-Average Method

A cost accounting method that calculates inventory and the cost of goods sold based on the average cost of all similar items in inventory.

First-In-First-Out (FIFO)

An inventory valuation method where the first items produced or acquired are the first to be sold or used, reflecting the chronological flow of goods.