Delta Diamonds Uses a Periodic Inventory System

question 25

Multiple Choice

Delta Diamonds uses a periodic inventory system.The company had five one-carat diamonds available for sale this year: one was purchased on June 1 for $500,two were purchased on July 9 for $550 each,and two were purchased on September 23 for $600 each.On December 24,it sold one of the diamonds that was purchased on July 9.Using the specific identification method,its ending inventory (after the December 24 sale) equals:

• A)$2,250.
• B)$1,650.
• C)$2,200.
• D)$550.

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Definitions:

Downstream Workstations

Downstream workstations are the subsequent stages or positions in a workflow or production line where additional processing or assembly takes place, following upstream operations.

Backflush Costing

A simplified accounting approach where production costs are flushed back at the end of a production process, used in just-in-time manufacturing environments.

Conversion Costs

The costs incurred to convert raw materials into finished products, typically including labor and manufacturing overhead.

Finished Goods

Refers to products that have completed the manufacturing process but have not yet been sold to customers.