Evans Company Had the Following Balances and Transactions During 2014

question 124

Multiple Choice

Evans Company had the following balances and transactions during 2014. $$\begin{array} { | l | l | } \hline \text { Beginning Merchandise Inventory } & 10 \text { units at } \$ 70 \\\hline \text { March } 10 & \text { Sold } 8 \text { units } \\\hline \text { June } 10 & \text { Purchased } 20 \text { units at } \$ 80 \\\hline \text { October 30 } & \text { Sold 15 units } \\\hline\end{array}$$ What is the amount of the company's Merchandise Inventory, as disclosed in the December 31, 2014 balance sheet as per the periodic last-in, first-out (LIFO) costing method?

• A) $400
• B) $490
• C) $560
• D) $540

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Definitions:

Gross Requirement

The total quantity of a material or part needed to fulfill production, before considering any inventory on hand or scheduled receipts.

Net Requirement

The total amount of a material or resource needed, after accounting for inventory on hand and any scheduled receipts.

Aggregate Planning

A marketing activity that aims to balance supply and demand by determining the most efficient level of production over a given time frame.

MRP

Material Requirements Planning, a system for managing manufacturing processes by determining material requirements and scheduling production activities.