Addison,Inc

question 124

Multiple Choice

Addison,Inc.uses a perpetual inventory system.The following is information about one inventory item for the month of September:

If Addison uses FIFO,the cost of the ending merchandise inventory on September 30 is

• A)$800
• B)$650
• C)$750
• D)$700

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Definitions:

Period Costs

Expenses that are not directly tied to the production process and are expensed in the period they are incurred.

Indirect Materials

Supplies used in the production process that are not directly traceable to a finished product.

Factory Overhead

Factory overhead refers to the indirect costs associated with manufacturing, excluding direct materials and direct labor.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product more efficiently.