Use This Inventory Information for the Month of September to Answer

question 113

Multiple Choice

Use this inventory information for the month of September to answer the following question. $\begin{array}{llll}\text { Sept. } & 1 & \text { Beginning inventory } & 10 \text { units @ } \$ 120 \\& 5 & \text { Purchase } & 60 \text { units @ } \$ 112 \\& 14 & \text { Sale } & 40 \text { units }\\&21& \text { Purchase } &30 \text { units @\$116 }\\&30 &\text { Sale }& 28 \text { units } \end{array}$

Assuming that a perpetual inventory system is used,what is ending inventory (rounded) under the average-cost method?

• A) $3,666
• B) $3,712
• C) $3,208
• D) $7,734

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Definitions:

Produces

Engages in the act of making, manufacturing, or creating goods and services for sale or distribution.

Cost of Goods Manufactured

The total production cost of goods completed and transferred out of the work-in-progress inventory during a specific period.

Direct Materials

Raw materials that are directly traceable to the production of specific goods.

Factory Overhead

All indirect manufacturing costs, including costs related to running the factory that cannot be directly tied to a specific product.