Lan Corporation Had Beginning Inventory of $42,000 and Expects Cost

question 1

Multiple Choice

Lan Corporation had beginning inventory of $42,000 and expects cost of sales of $96,000 units during the month. Desired ending inventory is $31,000. How much inventory should Lan Corporation purchase?

• A) $65,000
• B) $73,000
• C) $85,000
• D) $107,000

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Definitions:

Estimated Warranty Liability

A liability recorded on the financial statements to cover the expected cost of product warranties.

FICA Taxes

Federal Insurance Contributions Act taxes are payroll taxes deducted from employees' paychecks and matched by employers to fund Social Security and Medicare.

Medicare Taxes

Taxes collected in the United States to fund the Medicare program, typically withheld from employee earnings.

Union Dues

Fees paid by workers to labor unions for membership and benefits.