Eastview Company Uses a Periodic LIFO Inventory System, and Has

question 4

Multiple Choice

Eastview Company uses a periodic LIFO inventory system, and has the following purchases and sales: $$\begin{array} { | l | l | } \hline \text { January 1 } & 150 \text { units were purchased at \$9 per unit. } \\\hline \text { January 17 } & 120 \text { units were sold } \\\hline \text { January 20 } & 160 \text { units were purchased at \$11 per unit. } \\\hline \text { January 29 } & 150 \text { units were sold } \\\hline\end{array}$$
-What is the value of ending inventory?

• A) $2,670.
• B) $2,750.
• C) $360.
• D) $440.
• E) $2,730.

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Definitions:

Fixed Expenses

Overheads such as rent, employee salaries, and insurance that do not fluctuate with changes in sales or manufacturing volumes.

Contribution Margin Per Unit

The selling price per unit minus the variable cost per unit, indicating how much contributes to covering fixed costs and profit.

Operating Income

The profit realized from a business's operations after deducting operating expenses such as wages and cost of goods sold.

Contribution Format

A type of income statement that separates fixed and variable costs to highlight the contribution margin.