Tehran Ltd $\quad 120$ Units $@ \$ 3.14$ Per Unit
March 1 $\quad$

question 14

Multiple Choice

Tehran Ltd. uses FIFO to cost its inventory. The following information is available for Tehran's inventory of product # 101: Beginning inventory: $\quad 120$ units $@ \$ 3.14$ per unit
March 1: $\quad$ $\quad$ $\quad$ $\quad$ Purchase of 250 units @ $\$3.50$ per unit
April 10: $\quad$ $\quad$ $\quad$ $\quad$ Sale of 100 units @ $\$ 5.10$ per unit Assuming Tehran uses the perpetual inventory system, the second entry to account for the April 10 sale is

• A) debit Cost of Goods Sold and credit Inventory, $350.
• B) debit Cost of Goods Sold and credit Purchases, $350.
• C) debit Cost of Goods Sold and credit Inventory, $314.
• D) debit Cost of Goods Sold and credit Purchases, $314.

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Definitions:

ATC Curve

A graphical representation of the Average Total Cost, depicting how average cost of production varies with the quantity of output produced.

Efficient

Describes a process or system that achieves maximum productivity with minimum wasted effort or expense.

Economy

The system of production, distribution, and consumption of goods and services within a particular geographical area.

ATC Curve

Represents the Average Total Cost curve, showing the per-unit cost of production at different levels of output.