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Exam 7: Inventory

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Question 51

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The LCM rule is usually applied to groups of similar items.

A) True
B) False

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Question 52

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Just-in-time inventory systems are designed to reduce the cost of inventory storage and increase the amount of cash on hand.

A) True
B) False

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Question 53

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The cost of goods available for sale includes

Use the following information for questions below A company had the following inventory activity during April: $\begin{array}{l}\text { }\\\begin{array} { l l l l l} &&\text {units }&\text { unit cost}&\text { total cost}\\\text { beginning}&\text {inventory }&800&\$10.00&\$8,000\\\text { purchase}&\text {april 6 }&1,400&11.00&15,400\\\text {sale }&\text {april }&(1,500) \\\text {purchase }&\text {april 17}&900&10.50&9,450\\\text {sale }&\text {april 24 }&(900) \\\end{array}\end{array}$ -If the company is using a perpetual system and the weighted-average cost formula,what is the ending inventory closest to?

When using the LCM rule in Canada,the market value is most commonly

Gross margin is the difference between sales revenue and costs of goods available for sale.

Which of the following would most likely use a perpetual inventory system?

Foamy Suds Ltd.had a fire at its warehouse and was trying to determine the cost of the inventory lost.For the year to date,sales had been $525,000,opening inventory was $125,000,purchases to date were $318,000,and the cost-to-sales ratio is normally 60%.Inventory not damaged in the fire was $18,000.What was the cost of the inventory damaged in the fire?

Which of the following would be most likely to use the specific identification method?