Shipman,Inc

question 11

Multiple Choice

Shipman,Inc.has 6 units in inventory on December 31.The units were purchased in November for $200 each.The price lists from suppliers indicate the current replacement cost of the item to be $198 each.What is the effect on gross profit if Shipman values its ending merchandise inventory using the lower-of-cost-or-market rule?

• A)The gross profit would increase by $2.
• B)The gross profit would not be affected.
• C)The gross profit would decrease by $12.
• D)The gross profit would increase by $12.

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Definitions:

Psychological Problems

Refer to mental disorders and emotional distress, characterized by disruption in thinking, behavior, energy, or emotion which makes it difficult to cope with the ordinary demands of life.

Token Economy

A behavioral modification technique using tokens as a form of reinforcement for desirable behaviors, which can be exchanged for rewards.

Systematic Desensitization

A behavioral therapy technique used to help individuals gradually overcome phobias and anxiety through controlled exposure to the fear stimulus while in a relaxed state.

Role Playing

A method or technique used in teaching and therapy that involves assuming a role and acting it out in a realistic scenario for learning or behavioral modification.