Poole Company Purchased Two Identical Inventory Items

question 29

Multiple Choice

Poole Company purchased two identical inventory items.One of the items,purchased in January,cost $4.50.The other,purchased in February,cost $4.75.One of the items was sold in March at a selling price of $7.50.Poole uses LIFO.Which of the following statements is true?

• A)The balance in ending inventory would be $4.75.
• B)The amount of gross margin would be $2.75.
• C)The amount of ending inventory would be $4.625.
• D)The amount of cost of goods sold would be $4.50.

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Definitions:

Four-Firm Concentration Ratio

A measure that indicates the total market share controlled by the four largest firms within an industry.

Herfindahl Index

A measure of market concentration calculated by summing the squares of the market shares of all firms in the industry.

Herfindahl Index

A measure of market concentration to assess the level of competition within an industry, calculated by summing the squares of each company's market share.

Highly Elastic

Describes a situation where demand for a product is highly sensitive to changes in price, leading to significant changes in quantity demanded.