Question 11 pts

Company X purchased inventory for $2,700. X normally pays additional shipping charges of $300 per order, but in this one instance paid $900 to rush the shipment because inventory levels on hand had fallen unusually low. At what cost should X record the inventory? (omit , and $ in the answer)

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Question 21 pts

On December 20, 2012, Company X purchased $100 of inventory on account from its supplier. The supplier offered a 2% discount on the purchase if X pays within 10 days. X paid the discounted $98 on December 27. At what amount would X report the inventory on its balance sheet dated December 31? X uses the gross method of accounting for purchase discounts. (omit , and $ in the answer)

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Question 31 pts

When prices are rising, which inventory method produces a higher Ending Inventory?

FIFO

LIFO

Average Cost

Guesstimation

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Question 41 pts

When prices are falling, which inventory method generally produces a more accurate Ending Inventory?

FIFO

LIFO

Average Cost

Guesstimation

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Question 51 pts

Raw materials are not considered to be Inventory when they are first purchased; only after they are actually used in production.

True

False

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Question 61 pts

In March 2012, X Corp. purchased an item of inventory for $400. By June, that item could be purchased for $360 and re-sold for $440. Xs normal profit for the item is $50. At what amount should X report the item in its June 30 balance sheet? X uses the LIFO inventory cost flow assumption. (omit , and $ in the answer)

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Question 71 pts

X, Inc., uses the LIFO cost flow assumption. X had 100 items in its Jan. 1 beginning inventory balance, totaling $500 (that is, $5 each). X purchased another 200 items on Jan. 9 for $7 each. On Jan. 12 X sold 230 items for $10 each. By how much did this LIFO liquidation increase X's usual profit on a sale of 230 items? (omit , and $ in the answer)

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Question 81 pts

X, Inc., is a manufacturer that can produce 10,000 units per quarter at capacity. However, normal production ranges from 9,000 to 10,000 units. During the quarter, X has fixed overhead costs of $80,000 and produces only 8,000 units due to unexpected maintenance issues that forced the facility to close for several days. How much of the $80,000 in fixed overhead costs should X include in its Inventory balances for the quarter? (use the approach we discussed in class and omit , and $ in the answer)