McCarthy Company Has Inventory of 8 Units at a Cost

question 209

Multiple Choice

McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4.
-Using the FIFO perpetual inventory method, what is the value of inventory after the October 4 sale?

• A) $3,485.
• B) $3,445.
• C) $3,461.
• D) $3,472.
• E) $3,500.

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Definitions:

Cow Feed

Refers to the food given to cows, which can include grass, grains, and nutritional supplements to ensure healthy growth and milk production.

Hay

Dried grass used primarily as animal fodder, especially for grazing animals like cows and horses.

Consumer Surplus

The gap between the price consumers are prepared to pay for a product or service and the actual amount they end up spending.

Reservation Price

The maximum price a consumer is willing to pay for a good or service, beyond which they will choose not to purchase it.