Marlin Co Uses a Periodic Inventory System with the Specific Identification

question 9

Multiple Choice

Marlin Co. uses a periodic inventory system with the specific identification method of cost assignment. Inventory purchases for the month of August were:

$$\begin{array} { l l l r } & \text { Date } & \text { Urits } & \text { Urit Cost } 5 \\\hline \text { Begirruing Irvertory } & 1 \text {-Aug } & 2000 & 8.00 \\\text { Purchase } & 8 \text {-Aug } & 1000 & 10.00 \\\text { Purchase } & 16 \text {-Aug } & 1500 & 12.00 \\\text { Purchase } & \text { 27-Aug } & 1300 & 11.00\end{array}$$
On 24 August 1200 units from beginning inventory and 1000 units from the 16 August purchase were sold. What was the value of ending inventory at 31 August?

• A) $21 600
• B) $36 700
• C) $39 600
• D) $58 300

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Definitions:

Marginal Cost Curve

A graph that shows the change in the total cost of producing one additional unit of a product or service.

Average Total Cost

the total cost of production divided by the number of units produced, reflecting the average cost per unit of output.

Average Variable Cost

The total variable costs of production divided by the number of units produced, indicating the variable cost per unit.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.