Inventory Flow Assumptions The Perpetual Inventory Records of Handy Hardware Show 150 Units

question 58

Essay

Inventory flow assumptions
The perpetual inventory records of Handy Hardware show 150 units of a particular product on hand,acquired at the following dates and costs: On June 3,Handy sold 120 units of this product.
Instructions: Prepare a journal entry to record the cost of goods sold relating to the sale on June 3,assuming that Handy uses: (Show your computations as per below format.)
(a)A LIFO flow assumption.
(b)A FIFO flow assumption.
(c)The average cost (or moving average)flow assumption.

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Definitions:

Controllable Variance

Controllable variance is a measure used in managerial accounting to assess the differences between actual and budgeted amounts that management can influence or control.

Variable Overhead Costs

Variable overhead costs fluctuate with changes in production volume, including costs like utilities and raw materials not directly tied to a product.

Fixed Overhead Costs

Expenses that remain constant irrespective of the volume of production or sales, including rent, salaries, and insurance.

Production Volume

The total quantity of goods or services produced by a company during a specific period.