Signal Company Uses the Perpetual Inventory Method

question 36

Multiple Choice

Signal Company uses the perpetual inventory method. On January 1, 2013, Signal purchased 400 units of inventory that cost $2.00 each. On January 10, 2013, the company purchased an additional 600 units of inventory that cost $2.25 each. If Signal uses a weighted average cost flow method and sells 700 units of inventory for $4.00 each, the amount of gross margin reported on the income statement will be:

• A)$1,313.
• B)$1,295.
• C)$1,225.
• D)$1,505.

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Definitions:

Binocular Cues

Visual cues to depth or distance requiring two eyes.

Perceptual Research

The study of how people interpret and make sense of sensory information to understand the environment around them.

Illusions

Perceptions or interpretations that do not accurately reflect reality, often caused by deceptive or misleading visual cues.

Size Constancy

The perceptual phenomenon where the perceived size of an object remains constant despite changes in its distance from the observer.