Eaton Electronics Uses a Periodic Inventory System

question 23

Multiple Choice

Eaton Electronics uses a periodic inventory system.On March 31, Eaton has two plasma TVs on hand at a cost of $1,500 each (serial numbers 11534892 and 11534894) .In April, the company purchases four more identical TVs from Toshiba for $1,450 each (serial numbers 11542631 through 11542634) .In May, the company purchases five more identical TVs for $1,600 each (serial numbers 11550964 through 11550968) .In June, Eaton sells two of these TVs (serial numbers 11534894 and 11542631) .There were no additional purchases or sales during the remainder of the year.
-Use the information above to answer the following question.Eaton Electronics reports $3,000 as the cost of goods sold.Eaton Electronics is using the:

• A) specific identification method.
• B) LIFO method.
• C) FIFO method.
• D) weighted average cost method.

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Definitions:

Pure Monopolist

A single seller in a market who has the power to control market prices and output without any competition.

Unregulated Monopoly

A market structure where a single seller controls the entire market for a product or service, with no governmental restrictions in place.

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information.

Profit-maximizing

A company's goal to achieve the highest possible profit where the marginal cost of production is equal to the marginal revenue from sales.