Pasquale Has the Following Inventory Information A Physical Count of Merchandise Inventory on July 31 Reveals

question 37

Multiple Choice

Pasquale has the following inventory information. $\begin{array}{rrrr}\text { July } 1&\text { Beginning Inventory }&20 \text { units at } \$ 19&\$380\\7 & \text { Purchases } & 70 \text { units at } \$ 20 & 1,400 \\22 & \text { Purchases } & 10 \text { units at } \$ 24 & 240\\&&&\$2,020\end{array}$ A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using a periodic inventory system and the average-cost method, the cost of ending inventory is

• A) $585.
• B) $606.
• C) $630.
• D) $660.

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Definitions:

Job-Order Costing System

An accounting method that assigns costs to specific batches or job orders, useful in custom or batch production environments.

Production Departments

Specific functional areas in a factory where distinct stages of production activities are carried out.

Forming Department

The Forming Department is a sector within a manufacturing process where raw materials are shaped or formed into parts for further assembly or production.

Predetermined Overhead Rate

A rate calculated before the accounting period begins, used to allocate manufacturing overhead costs to individual units of production based on a specific activity, such as machine hours or labor hours.