Question : Learning Objective 5-3 1) FIFO means that the costs of the : 1253237

 

Learning Objective 5-3

 

1) FIFO means that the costs of the oldest items in inventory are ________.

A) the costs that attach to ending inventory at the end of the period

B) the costs that attach to the inventory sold during the period

C) reduced to the lower of cost or market value during the period

D) expensed when purchased

 

2) Which method results in the cost of goods sold equaling the exact cost of the actual goods that have been sold?

A) FIFO

B) LIFO

C) Weighted average method

D) Specific identification

3) Which method requires the unit cost is calculated by dividing the total cost of goods available for sale by the total number of units available for sale?

A) FIFO

B) LIFO

C) Weighted average method

D) Specific identification

 

4) GAAP for inventory costs ________.

A) allow two cost flow assumptions: FIFO and LIFO

B) require companies to report the same net income regardless of which inventory cost flow assumption is used. This is called the income conformity rule

C) allow for only one inventory cost flow assumption to enhance comparability

D) allow for more than two inventory cost flow assumptions

 

5) Vango, Inc. sells part number 86Z to auto parts stores around the world. Information about part number 86Z is contained in the table below. Vango uses a FIFO periodic inventory system.

 

 

Number of Units

Unit Cost

Total Cost

Beginning inventory

2,000

$8.00

$16,000

Purchase

3,000

$8.20

$24,600

Purchase

5,000

$8.60

$43,000

   Totals

10,000

 

$83,600

 

Determine the cost of goods sold and ending inventory value of part 86Z, if 4,000 units remain unsold in inventory at the end of the accounting period.

A) Cost of goods sold is $49,200 and ending inventory is $34,400.

B) Cost of goods sold is $34,400 and ending inventory is $49,200.

C) Cost of goods sold is $50,160 and ending inventory is $33,440.

D) Cost of goods sold is $51,200 and ending inventory is $32,400.

6) Vango, Inc. sells part number 86Z to auto parts stores around the world. Information about part number 86Z is contained in the table below. Vango uses a FIFO perpetual inventory system.

 

 

Number of Units

Unit Cost/Price

Total Cost

Beginning inventory

2,000

$8.00

$16,000

Purchase

3,000

$8.20

$24,600

Sale

(6,000)

$15.00

 

Purchase

5,000

$8.60

$43,000

 

Determine the cost of goods sold and ending inventory value of part 86Z, if 4,000 units remain unsold in inventory at the end of the accounting period.

A) Cost of goods sold is $49,200 and ending inventory is $34,400.

B) Cost of goods sold is $34,400 and ending inventory is $49,200.

C) Cost of goods sold is $50,160 and ending inventory is $33,440.

D) Cost of goods sold is $51,200 and ending inventory is $32,400.

 

7) Vango, Inc. sells part number 86Z to auto parts stores around the world. Information about part number 86Z is contained in the table below. Vango uses a LIFO periodic inventory system.

 

 

Number of Units

Unit Cost

Total Cost

Beginning inventory

2,000

$8.00

$16,000

Purchase

3,000

$8.20

$24,600

Purchase

5,000

$8.60

$43,000

   Totals

10,000

 

$83,600

 

Determine the cost of goods sold and ending inventory value of part 86Z, if 4,000 units remain unsold in inventory at the end of the accounting period.

A) Cost of goods sold is $49,200 and ending inventory is $34,400.

B) Cost of goods sold is $34,400 and ending inventory is $49,200.

C) Cost of goods sold is $50,160 and ending inventory is $33,440.

D) Cost of goods sold is $51,200 and ending inventory is $32,400.

8) Vango, Inc. sells part number 86Z to auto parts stores around the world. Information about part number 86Z is contained in the table below. Vango uses a weighted average cost periodic inventory system.

 

 

Number of Units

Unit Cost

Total Cost

Beginning inventory

2,000

$8.00

$16,000

Purchase

3,000

$8.20

$24,600

Purchase

5,000

$8.60

$43,000

   Totals

10,000

 

$83,600

 

Determine the cost of goods sold and ending inventory value of part 86Z, if 4,000 units remain unsold in inventory at the end of the accounting period.

A) Cost of goods sold is $49,200 and ending inventory is $34,400.

B) Cost of goods sold is $34,400 and ending inventory is $49,200.

C) Cost of goods sold is $50,160 and ending inventory is $33,440.

D) Cost of goods sold is $51,200 and ending inventory is $32,400.

 

9) Fargo Engines Incorporated sells part number 45G to toy manufacturers around the world. Information about part number 45G is contained in the table below. Fargo uses a LIFO periodic inventory system.

 

 

Number of Units

Unit Cost

Total Cost

Beginning inventory

2,000

$8.00

$16,000

Purchase

3,000

$8.20

$24,600

Purchase

5,000

$8.60

$43,000

   Totals

10,000

 

$83,600

 

Determine the cost of goods sold and ending inventory cost of part 45G, if 2,000 units remain unsold in inventory at the end of the accounting period.

A) Cost of goods sold is $67,600 and ending inventory is $16,000.

B) Cost of goods sold is $66,600 and ending inventory is $17,000.

C) Cost of goods sold is $66,200 and ending inventory is $17,400.

D) Cost of goods sold is $8,000 and ending inventory is $2,000.

10) Fargo Engines Incorporated sells part number 45G to toy manufacturers around the world. Information about part number 45G is contained in the table below. Fargo uses a weighted-average periodic inventory system.

 

 

Number of Units

Unit Cost

Total Cost

Beginning inventory

2,000

$8.00

$16,000

Purchase

3,000

$8.20

$24,600

Purchase

5,000

$8.60

$43,000

   Totals

10,000

 

$83,600

 

Determine the cost of goods sold and ending inventory cost of part 45G if 2,000 units remain unsold in inventory at the end of the accounting period.

A) Cost of goods sold is $66,133 and ending inventory is $17,467.

B) Cost of goods sold is $66,267 and ending inventory is $25,733.

C) Cost of goods sold is $65,803 and ending inventory is $26,197.

D) Cost of goods sold is $66,880 and ending inventory is $16,720.