WorksheetsQuizizz 5.2.3/5.2.4 How to Calculate Inventory Cost ACNT1
Total questions: 10
Worksheet time: 5mins
If a business purchases inventory before it is ready for sale, such as component parts, _____ costs may be incurred.
processing
distribution
holding
shrinkage
If items are lost or stolen in inventory, _____ costs may be incurred.
processing
shrinkage
distribution
holding
Freight trucking, rail or air transport, and light-vehicle deliveries contribute to _____ costs.
processing
shrinkage
distribution
holding
The cost of goods sold is based on the most recent purchases under which method of calculating inventory cost?
gross profit method
first in, first out (FIFO)
weighted average method
last in, first out (LIFO)
Which method of calculating inventory cost allows a business to store inventory without indicating which batch it belongs to?
weighted average method
last in, first out (LIFO)
last in, first out (LIFO)
gross profit method
Which method of calculating inventory cost is used to estimate the amount of ending inventory?
last-in, first-out (LIFO)
gross profit method
first-in, first-out (FIFO)
weighted average method
A business purchases two units at $50 each, and later purchases three more at $60 each. Shortly afterwards, one is sold. What is the cost of the inventory remaining under the LIFO method?
$224
$230
$220
$234
A business had an inventory cost of $40,000 the last time it was counted. Since then, it made $80,000 in purchases and sales of $110,000. Its gross profit was 25%. What is its estimated inventory at cost using the gross profit method?
$42,500
$35,000
$40,000
$37,500
Which of the following is an advantage of the first in, first out (FIFO) method?
It reduces the risk of spoilage.
It results in lower tax liability.
Record keeping is simple under this method.
This method involves no complex calculations.
Which of the following is an advantage of the weighted average method?
It makes large inventories with many small items easier to count repeatedly.
It does not require original cost to determine the price of an item.
It allows the costs of expensive units to be recovered if costs vary widely.
It can replace the need for physical inventory counting altogether.
