A Company Sells a Climbing Kit and Uses the Periodic

question 8

Multiple Choice

A company sells a climbing kit and uses the periodic inventory system to account for its merchandise.The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $357,what inventory method was used?

• A)LIFO
• B)FIFO
• C)Weighted average
• D)Specific identification
• E)Retail inventory method

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Definitions:

Shut-down Point

The price and quantity point at which a business ceases operations because continuing would result in losses.

Economically Efficient

A situation where resources are allocated in a way that maximizes the net benefit to society or minimizes the cost of achieving a set output level.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.

Social Cost

The total cost to society of an activity or decision, including both direct costs borne by the individual and indirect costs absorbed by the broader community.