A Company Purchased 100 Units for $30 Each on January

question 15

Multiple Choice

A company purchased 100 units for $30 each on January 31. It purchased 150 units for $25 on February 28. It sold 150 units for $50 each from March 1 through December 31. If the company uses the first-in, first-out inventory costing method, what is the amount of Cost of Goods Sold on the income statement for the year ending December 31? (Assume that the company uses a perpetual inventory system.)

• A)$3,000
• B)$4,000
• C)$4,250
• D)$6,750

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Definitions:

MAD

Mean Absolute Deviation, a measure used in statistics to quantify the average absolute dispersion or deviation from the mean or average.

Materials Management

The function responsible for planning, sourcing, moving, and storing materials required to produce goods and services.

Physical Supply

The actual, tangible products and raw materials available in the market or held by a company.