Cho Co. Sells Product

question 81

Essay

Cho Co. sells product
A. The beginning inventory for product A was 70 units @ $60 per unit. During the year, Cho purchased 110 units of product A at $54 per unit. The company sold 140 units of product A @ $100 per unit at the end of the year.Required:
Determine the amount of product cost that would be allocated to cost of goods sold and ending inventory using (1) FIFO, (2) LIFO, and (3) weighted average.

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Definitions:

Period Cost

Costs that are expensed in the period in which they are incurred, typically related to selling, general, and administrative activities rather than production.

Selling and Administrative Expense

The combined total of all expenses directly related to the selling of products and the administration of a business.

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are an integral part of the finished product.

Transportation Out

Transportation out refers to the costs associated with delivering goods from a seller to a buyer, often recognized as a selling expense.