Use This Inventory Information for the Month of March to Answer

question 53

Multiple Choice

Use this inventory information for the month of March to answer the following question. Assuming that a periodic inventory system is used,what is ending inventory (rounded) under the average-cost method?

• A)$2,079
• B)$2,685
• C)$3,861
• D)$5,940

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Definitions:

Pledging Receivables

Pledging receivables involves using the money owed to a company by its customers as collateral for a loan.

Effective Cost

Effective cost refers to the total cost of a financing option when all charges, fees, and interest payments are taken into account.

Annual Rate

The interest rate for a period of one year, often used to compare the yields of different investment and financing options.

ABC System

A system of controlling inventory that recognizes the differing cost and importance of various items. A parts are expensive and/or important and are controlled carefully. C parts are cheap and plentiful, so little effort is expended to monitor them. B parts are between As and Cs.