BAT CH6 02

Using the average cost flow assumption, the amount allocated to the ending inventory on February 28 is

• 1750

• 1875

• 1762

• 5813

Using the FIFO inventory cost flow assumption, the amount allocated to cost of goods sold for June is

• 10000

• 10600

• 13000

• 20800

Using the average cost flow assumption, the amount allocated to the ending inventory on June 30 is

• 19323

• 11473

• 20800

• 10600

A company purchased inventory as follows: 200 units at $9 and 300 units at $10. The average unit cost for inventory is

• $9.00.
• $9.50.
• $9.60.
• $10.00.

In a period of rising prices, ending inventory using the FIFO cost flow assumption will be ______________ ending inventory determined using average cost.

• higher than
• lower than
• equal to
• Cost flow assumptions have no impact on ending inventory.

The cost of goods available for sale consists of which two elements?

• The cost of beginning inventory and the cost of ending inventory
• The cost of ending inventory and the cost of goods purchased during the year
• The cost of beginning inventory and the cost of goods purchased during the year
• The difference between the costs of goods purchased and the cost of goods sold during the year

The requirement for a company to use the same cost flow assumption from one period to the next is an example of the

• consistency characteristic.
• revenue recognition principle.
• matching principle.
• full disclosure principle.

The cost of goods available for sale is allocated between

• beginning inventory and ending inventory.
• beginning inventory and cost of goods on hand.
• ending inventory and cost of goods sold.
• beginning inventory and cost of goods purchased.

Levy's Used Cars uses the specific identification method of costing inventory. During March, Levy purchased three cars for $5,000, $6,500, and $8,000, respectively. During March, two cars are sold for $7,500 each. Levy determines that at March 31, the $8,000 car is still on hand. What is Levy's gross profit for March?

• 2000
• 3500
• 500
• 7000

Of the following companies, which one would not likely employ the specific identification method for inventory costing?

• Music store specializing in organ sales
• Farm Implement dealership
• Antique shop
• Hardware store