The Following Lots of a Particular Commodity Were Available for Sale

question 31

Multiple Choice

The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 25 units of the commodity on hand at the end of the year.
What is the amount of the inventory at the end of the year using the FIFO method?

• A) $1,685
• B) $1,575
• C) $1,805
• D) $3,585

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific activities, providing a more accurate reflection of costs.

Direct Labor-Hours

Direct labor-hours are the total hours worked by employees directly involved in the manufacturing process.

Direct Materials Cost

The cost of raw materials used to produce a product, which are directly attributable to the product.

Direct Labor-Hours

The combined working hours of employees directly contributing to the manufacturing cycle.