Adam IncUses a Perpetual Inventory System

question 164

Multiple Choice

Adam Inc.uses a perpetual inventory system. If Adam uses the FIFO method,how much is cost of goods sold for the month of January?

• A)$204
• B)$208
• C)$212
• D)$560

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Definitions:

High-low Method

A method employed in accounting that calculates variable and fixed expenses by analyzing the maximum and minimum activity levels.

Variable Manufacturing Cost

Costs that vary in direct proportion to the changes in production volume, including direct materials, direct labor, and variable manufacturing overhead.

Monthly Production Volume

The total number of units a company manufactures or produces in a month.

Least-squares Regression

A statistical method used to determine the line of best fit by minimizing the sum of squares of the differences between observed values and the values predicted by the model.