Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items

Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?
Answer

FIFO

LIFO

average

specific identification
2 points
Question 2
Which of the following measures the relationship between cost of merchandise sold and the amount of inventory carried during the period?
Answer

inventory turnover

number of days’ sales in inventory

retail method of inventory costing

gross profit method of inventory costing
2 points
Question 3
Which of the following is used to analyze the efficiency and effectiveness of inventory management?
Answer

inventory turnover only

number of days’ sales in inventory only

both inventory turnover and number of days’ sales in inventory

neither inventory turnover or number of days’ sales in inventory
2 points
Question 4
When merchandise sold is assumed to be in the order in which the purchases were made, the company is using
Answer

first-in, last-out

last-in, first-out

first-in, first-out

average cost
2 points
Question 5
Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date
Product Z
Units
Cost
May 3
Purchase
5
$30
May 10
Sale
3

May 17
Purchase
10
$34
May 20
Sale
6

May 23
Sale
3

May 30
Purchase
10
$40
Assuming that the company uses the perpetual inventory system, determine the cost of merchandise sold for the sale of May 20 using the FIFO inventory cost method.
Answer

$250

$180

$196

$204
2 points
Question 6
Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date
Product Z
Units
Cost
May 3
Purchase
5
$30
May 10
Sale
3

May 17
Purchase
10
$34
May 20
Sale
6

May 23
Sale
3

May 30
Purchase
10
$40
Assuming that the company uses the perpetual inventory system, determine the ending inventory value for the month of May using the FIFO inventory cost method.
Answer

$494

$502

$422

$520
2 points
Question 7
Use the following information to answer the following questions.

The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. The company had no beginning inventory on May 1.

Date
Product Z
Units
Cost
May 3
Purchase
5
$30
May 10
Sale
3

May 17
Purchase
10
$34
May 20
Sale
6

May 23
Sale
3

May 30
Purchase
10
$40
Assuming that the company uses the perpetual inventory system, determine the gross profit for the sale of May 23 using the FIFO inventory cost method.
Answer

$78

$90

$102

$180
2 points
Question 8
Too much inventory on hand
Answer

reduces solvency

increases the cost to safeguard the assets

increases the losses due to price declines

all of the above
2 points
Question 9
The inventory costing method that reports the most current prices in ending inventory is
Answer

FIFO

Specific identification

LIFO

Average cost
2 points
Question 10
The inventory costing method that reports the earliest costs in ending inventory is
Answer

FIFO

LIFO

Average cost

Specific identification
2 points
Question 11