The Following Information for Year 2 Is Taken from the Accounts

question 86

Multiple Choice

The following information for Year 2 is taken from the accounts of Tuttle Company. The company uses the periodic inventory system. Based on this information, what is the inventory at December 31, Year 2?

• A)$28,860
• B)$21,460
• C)$12,340
• D)$19,120

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Definitions:

Minimum ATC

The lowest point on the Average Total Cost curve, indicating the most efficient scale of production for a firm in the long run.

Economic Profit

Profits earned by a firm or an individual after subtracting both the explicit costs and opportunity costs of resources employed.

Short Run

A time period in which at least one factor of production is fixed and cannot be changed, contrasting with the long run where all factors are variable.

Perfectly Competitive Firm

A company that operates in a market where there are many buyers and sellers, where it sells a homogeneous product and where there is free entry and exit from the market.