Abdol Company, Which Has Only One Product, Has Provided the Following

question 88

Multiple Choice

Abdol Company, which has only one product, has provided the following data concerning its most recent month of operations:
-What is the total period cost for the month under the absorption costing approach?

• A) $32,500
• B) $71,500
• C) $302,500
• D) $231,000

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Definitions:

Ending inventory

The value of goods available for sale at the end of an accounting period, a crucial component for calculating the cost of goods sold (COGS).

Earliest costs

This term is not standard in financial terminology; it may refer to historical costs, which are the original monetary value of an economic item.

Perpetual inventory system

An inventory management system where updates are made continuously to record sales and purchases of inventory.

FIFO inventory cost method

A method to assign costs to inventory that assumes the first items purchased are the first ones sold, primarily affecting the cost of goods sold and ending inventory value.