Answer:
False
Explanation:
The assertion is false that when LIFO is used with the periodic inventory system, cost of goods sold is assigned costs from the most recent purchases at the point of each sale, rather than from the most recent purchases for the period.
Under this method it is <u>at the end of the accounting year that the Inventory account is adjusted to equal the cost of the merchandise that is unsold.</u>
It is important to note that under LIFO periodic (not LIFO perpetual) <u>we wait until the entire year is over before assigning the costs. </u>Then we flow the year's last costs first, even if those goods arrived after the last sale of the year.
Answer:
$214,000
Explanation:
The total reservation cost per month is given by the following expression:
Where 'n' is the number of monthly reservations.
If there are 200,000 reservations for passengers taking a trip next month, the reservation cost is:
Total reservation cost is $214,000.
Explanation:
Period costs are always expensed on the income statement in the period in which: they are incurred.
Answer:
b. 51,429 units
Explanation:
If x = Number of units
Net Income = Sales Revenue - Variable Cost - Fixed Cost
or
Net Income = Contribution Margin - Fixed Cost
where,
Net Income = $80,000
Contribution Margin per unit = $3.50
Fixed Cost = $100,000
Contribution Margin = Net Income + Fixed Cost
$3.50x = $80,000 + $100,000
$3.50x = $180,000
Dividing the above equation by $3.50 we get
x = $180,000 / $3.50
x = 51,429 units
Hence 51,429 number of units must be sold to generate the net income of $80,000.
