Diligent Ltd Had Five Units of the Commodity Algo on Hand

question 7

Multiple Choice

Diligent Ltd had five units of the commodity Algo on hand at 1 September 2019. The following purchases and sales were made during September: What was the value of cost of goods sold of Algo, using the LIFO assumption in a perpetual inventory system?

• A) $2 600
• B) $2 700
• C) $2 720
• D) $1 400

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Definitions:

Average Propensity

The ratio of total spending (consumption or saving) to total income, indicating how income is distributed across different economic activities.

Marginal Propensity

The measure of how much consumption changes with a change in disposable income, indicating the proportion of additional income that is spent on consumption.

Consumption Spending

The total value of all goods and services consumed by households over a specified period.

Marginal Propensity

The ratio of the change in an economic variable (such as consumption or saving) in response to a change in another variable (such as income).