Use This Inventory Information for the Month of June to Answer

question 51

Multiple Choice

Use this inventory information for the month of June to answer the following question. $\begin{array}{llll}\text { June } & 1 & \text { Beginning inventory } & 10 \text { units @ } \$120\\& 5 & \text { Purchase } & 60 \text { units } @ \$ 112\\&14 & \text { Sale } & 40 \text { units } \\&21 & \text { Purchase } & 30 \text { units @ } \$ 116 \\&30 & \text { Sale } & 28 \text { units }\end{array}$
What is cost of goods sold under the specific identification method?

• A) More information is needed.
• B) $3,704
• C) $7,696
• D) $7,736

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Definitions:

Direct Expenses

Expenses that can be directly traced to producing specific goods, services, or units of production without any allocation.

Departmental Income Statements

Financial reports that detail the revenue, expenses, and net income for specific departments within an organization.

Service Departments

Units within an organization that provide support services to other departments rather than directly contributing to profit generation.

Operating Departments

Departments within an organization that are directly involved in carrying out its primary activities or business operations.