Grays Company Has Inventory of 10 Units at a Cost

question 42

Multiple Choice

Grays Company has inventory of 10 units at a cost of $10 each on August 1. On August 3, it purchased 20 units at $12 each. 12 units are sold on August 6. Using the FIFO perpetual inventory method, what amount will be reported as cost of goods sold for the 12 units that were sold?

• A) $130.
• B) $120.
• C) $128.
• D) $124.
• E) $140.

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Definitions:

Ethical Organization

An entity that prioritizes ethical values in its decisions, policies, and interactions with stakeholders.

Planned Obsolescence

A strategy where products are designed to have a limited useful life or become outdated quickly, encouraging consumers to purchase newer models.

Enterprise Resource-Planning System

Integrated software applications designed to manage a company’s resources, processes, and information across all functional departments.

Just-In-Time System

A production strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs, aiming to have the exact amount of material, at the right time, and the right place.