Vargas Company Uses the Perpetual Inventory System and the FIFO

question 38

Multiple Choice

Vargas Company uses the perpetual inventory system and the FIFO cost flow method. During the current year, Vargas purchased 1,300 units of inventory that cost $14 each. At a later dateduring the year, the company purchased an additional 1,700 units of inventory that cost $15 each. Vargas sold 1,400 units of inventory for $18.What is the amount of cost of goods sold that will appear on the current year's income statement?

• A)$5,500
• B)$18,200
• C)$4,200
• D)$19,700

Distinguish between secured and unsecured creditors and their priorities.

Recognize the concept and importance of perfection in secured transactions.

Know the various methods of achieving perfection under the UCC.

Understand the role and rights of buyers in the ordinary course of business in relation to security interests.

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Definitions:

Sensation

The detection, by sense organs, of physical energy emitted or reflected by physical objects.

Perception

The process by which individuals organize and interpret their sensory impressions to give meaning to their environment.

Sensory Stimuli

External factors or events that trigger sensory responses or reactions.

Wavelength

Wavelength is the distance between successive peaks of a wave, especially points in a sound wave or electromagnetic wave.