The Alexandra Company Uses the Retail Inventory Method and the Average

question 26

Multiple Choice

The Alexandra Company uses the retail inventory method and the average cost flow assumption for preparation of its interim reports. Information about Alexandra's inventory in the second quarter of 2014 is shown below: $\begin{array}{c}\begin{array}{lll}\underline{\text {Retail}}\\\$ 800 \\1,400 \\200 \\(500) \\1,300\end{array}\begin{array}{lll}\underline{\text { Cost }} \\\$ 255 \\600 \\\\\\\\\end{array}\begin{array}{lll}\\\text {Begining inventoty}\\\text {Purchases}\\\text {Net markups}\\\text {Net matkdowns}\\\text {Sales}\end{array}\end{array}$
What is the estimated cost of Alexandra's inventory on June 30, 2014?

• A) $270
• B) $300
• C) $585
• D) $600

---

Definitions:

Profit Centers

Segments or divisions within an organization that are directly responsible for generating profit through their operations and decision-making.

Transfer Price

The price at which goods, services, or intellectual properties are traded between divisions within the same company.

Lemonade Stand

A small, temporary business venture, often run by children, that sells lemonade.

Intermediate Good

Goods that are used in the production process to produce final goods or services.