Maxell Company Uses the Periodic FIFO Method to Assign Costs

question 20

Multiple Choice

Maxell Company uses the periodic FIFO method to assign costs to inventory and cost of goods sold.Given the following information,what would be reported as the cost of goods sold and ending inventory balances for the period? $$\begin{array} { | c | r | r | } \hline \text { Date}& \text {Transaction } & \text { of units } & \text { Cost per unit } \\\hline \text { Jaruary 1}& \text {Begirning balance } & 100 & \$ 5 \\\hline \text { Jaruary2} &\text { Purchase } & 75 & \$ 4 \\\hline \text { Jaruaary 5} &\text{Sale } & 75 & \\\hline \text { Jaruary 6 } &\text { Sale } & 50 & \\\hline\end{array}$$

• A)COGS = $625,ending inventory = $175
• B)COGS = $575,ending inventory = $225
• C)COGS = $550,ending inventory = $250
• D)COGS = $600,ending inventory = $200

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Definitions:

Controlled

Describes an experimental condition or variable that is carefully managed or regulated to isolate its effects.

Information Processing

A psychological model that describes how humans perceive, analyze, manipulate, and store information, akin to the functions of a computer.

Attention

Information processing involving the ability to strategically choose among and sort out different stimuli in the environment.

Selective Encoding

The process of focusing attention on relevant information while ignoring irrelevant information during problem solving and decision making.