Abbott Inc

question 24

Essay

Abbott Inc.began the year with 750 units of inventory valued at $20 each under LIFO.During the first quarter, 300 units were purchased at $25 each and another 250 units were purchased at $28 each.Assume that 200 units are on hand at the end of the first quarter and that the current replacement cost is $30 per unit.
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Required:
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If Abbott plans to have 500 units on hand at year end, determine the cost of goods sold for the first quarter.

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Definitions:

Marginal Cost Curve

A graphical representation showing the change in total production cost resulting from producing one additional unit of a good.

Upward-Sloping

Typically refers to the positive slope of a supply curve in economics, indicating that as the price increases, the quantity supplied also increases.

Output

The collective volume of products or services generated by an enterprise, sector, or economic system.

Average-Total-Cost Curve

A graphical representation showing the average cost per unit of output at different levels of production, typically U-shaped due to economies and diseconomies of scale.