Inventory Flow Assumptions Flat TV Uses a Perpetual Inventory System. Shown Below Are

question 102

Essay

Inventory flow assumptions
Flat TV uses a perpetual inventory system. Shown below are Flat TV's beginning inventory of a particular product and purchases during January:

On January 23 (prior to the purchase on January 25), Flat TV sold 13 units of this product.
Determine the cost of goods sold relating to the sale on January 23 under each of the following flow assumptions. (Show your computations.)

---

Definitions:

Sales Volume

This refers to the total number of units of a product or service sold over a specific period.

Account Analysis

A method for analyzing cost behavior in which an account is classified as either variable or fixed based on the analyst’s prior knowledge of how the cost in the account behaves.

Mixed Cost

An expense that contains both fixed and variable components, changing in total with the level of activity though containing a constant element.

Fixed Cost

Expenses that do not change in total with changes in the level of output or activity within a certain range.