Beech Soda, Inc On 14 January, Beech Soda, Inc

question 49

Multiple Choice

Beech Soda, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows:
$\begin{array} { | l | c | c | c | } \hline & \text { Quantity } & \text { Unit Cost (\$) } & \text { Total Cost (\$) } \\\hline \text { Beginning inventory (1 Jan) } & 16 & 10 & 160 \\\hline \text { Purchases (11 Jan.) } & 14 & 12 & 168 \\\hline \text { Purchase (20 Jan.) } & 23 & 15 & \underline { 345 } \\\hline \text { Total } & 53 & & 673 \\\hline\end{array}$
On 14 January, Beech Soda, Inc. sold 25 units of this product. The other 28 units remained in inventory at 31 January.


-Assuming that Beech Soda uses the FIFO flow assumption, the 28 units of this product in inventory at 31 January have a total cost of:

• A) $400.
• B) $395.
• C) $405.
• D) $410.

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Definitions:

Potential Output

The highest level of economic output an economy can sustain over the long term without increasing inflation, determined by available resources and technology.

Aggregate Demand

The sum total of desires for products and services within an economic entity, marked at a specific price level through a chosen timeframe.

Expansionary Gap

Occurs when an economy's actual output is higher than the potential output, often leading to higher inflation.

Active Approach

A management strategy where decisions are made using discretionary methods to try to outperform the market or a specific benchmark.