Berring Sales Uses the Average- Cost Method

question 2

Multiple Choice

Berring Sales uses the average- cost method. The partially completed inventory record for January appears below. On 14 January, the company sold 10 units. On 29 January, the company sold 50 units. Complete the inventory record through to the 14 January sale, and calculate the Cost of sales for the 14 January sale. (Please round to the nearest whole dollar.)

• A)$42
• B)$40
• C)$38
• D)$33

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Definitions:

Fixed Cash Outflows

Regular, set payments made by a business, such as rent, salary payments, and loan repayments.

Operating Leverage

An indicator of how increases in revenue lead to rises in operational profit, reflecting the company's balance of fixed to variable expenses.

Fixed Costs

Expenses that do not vary with production level or sales volume, such as rent, salaries, and insurance premiums.

Rent

Payment made by a tenant to a landlord for the use of a property.