A Company Has Collected the Following Inventory Data for an Item

question 1

Multiple Choice

A company has collected the following inventory data for an item. What is the total annual cost for this item?

• A)275
• B)450
• C)5,275
• D)5,450

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Definitions:

Credit Memo

A Credit Memo is a document issued by a seller to a buyer, reducing the amount that the buyer owes to the seller, typically due to a return or an overpayment.

Perpetual Inventory

A system for managing inventory that instantly logs inventory sales or purchases via computerized point-of-sale systems and software for enterprise asset management.

Freight

The charge paid for transport of goods, typically either by land, sea, or air.

FOB Destination

A shipping term indicating that the sale is considered complete and the goods owned by the buyer upon arrival at the buyer's location.