Williams Inc

question 75

Multiple Choice

Williams Inc.had the following balances and transactions during 2014. The company maintains its records of inventory on a perpetual basis using the last-in,first-out method.Calculate the amount of ending Merchandise Inventory at December 31,2014 using the lower-of-cost-or-market rule.

• A)$1,200
• B)$1,360
• C)$1,020
• D)$2,040

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Definitions:

Markup

A pricing strategy where a seller adds to the cost of the goods to determine the selling price, aimed at ensuring a profit margin above cost.

Selling Prices

The actual amount that a customer pays for a product or service, which can include discounts, promotions, and taxes.

Markup

The amount added to the cost price of goods to cover overhead and profit, determining the selling price of the product.

Selling Price

The cost at which an item is offered to buyers in the marketplace.