Your Company Has 500 Units in Inventory That Were Purchased

question 8

Multiple Choice

Your company has 500 units in inventory that were purchased for $12 each.These units have a current market value of $15 each.Your supplier has just announced a price increase to $16.50 that will go into effect at the beginning of next year.Management should:

• A) make no adjustments to the inventory account.
• B) adjust the inventory account using the lower of the recent market values, which is $15.
• C) adjust the inventory account using the cost, which is $12.00.
• D) adjust the inventory account using the average of the recent market values, which is $14.50.

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Definitions:

Turabian Manual Style

A guide for writing and formatting research papers, theses, and dissertations, particularly noted for its citation styles.

Endnotes

Notes placed at the end of a document or book that provide additional information or references.

Gainsharing Plans

Incentive programs where employees receive bonuses for performance improvements or cost savings within the company.

Balanced Scorecards

A strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals.