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Art Supplies It's September and Sophia Wants to Buy Some Arts and Arts

question 51

Multiple Choice

Art Supplies
It's September and Sophia wants to buy some arts and crafts supplies for an after-school program she is developing for her daughter's elementary school. In her Sunday newspaper was a flyer from Michaels, an arts and crafts retailer. As she looked through the newspaper insert, she noticed that if she purchased three or more bottles of Alene's Tacky Glue, the regular price of $1.50 each was reduced to $1.15 each. She also saw that the store priced its plastic storage boxes at $1.99, $3.99, and $5.99. She thought they would be useful for storing each child's projects. On the front page of the flyer was an ad for Funky Girls Gel Pens, something she knew her daughter would love to use. The price at Michael's was $6.99 lower than the price she had found at the other stores that carried the pens. She thought that some of the older girls might like to start a scrapbook and was pleased to find that Michaels had a scrapbook starter kit, which includes scissors, book, pages, and stickers for only $15. The items could be purchased separately for $19.99. The flyer also announced that all flag-related items leftover from its Fourth of July sale were reduced by 40 percent.
-Refer to Art Supplies.What pricing practice was used with the scrapbook starter kit?

Definitions:

Retail Inventory Method

An accounting procedure for estimating inventory value by applying a percentage cost-to-retail price.

Inventory Value

The total cost or market value of all items held in inventory, including raw materials, work-in-progress, and finished goods.

FIFO Cost Flow Assumption

An inventory valuation method where goods purchased first are the first sold, assuming costs are charged in the order in which they are incurred.

LIFO Cost Flow Assumption

An inventory valuation method that assumes the last items added to inventory are the first sold, affecting the cost of goods sold and ending inventory value.