A Company Purchases and Sells Roofoo

question 5

Multiple Choice

A company purchases and sells Roofoo. It began last year with five units of Roofoo on hand at a cost of $10 each, and during the year its purchases and sales were as follows:

What was the value of the ending inventory of Roofoo, using the FIFO assumption?

• A) $30
• B) $39
• C) $45
• D) $15

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Definitions:

Supply Chains

Complex networks of suppliers, manufacturers, and distributors that produce, handle, and distribute goods and services from origin to consumer.

Safety Inventory

Extra stock kept in storage to guard against uncertainty in demand or supply, ensuring that a company can meet customer orders without delays.

Forecasted Demand

An estimation of the quantity of a product or service that consumers will purchase in the future.

Forecasting Errors

The difference between actual outcomes and previously predicted values, typically observed in the context of demand forecasting or financial forecasts.