An internal auditor found the following information while reviewing the monthly financial statements for a wholesaler of safety glasses: Opening inventory: 1,000 units at $2 per unit Purchased: 5,000 units at $3 per unit Sold: 3,000 units at $7 per unit The cost of goods sold was reported at $8,500. Which of the following inventory methods was used to derive this value?
A) Average cost method.
B) First-in, first-out (FIFO) method.
C) Specific identification method.
D) Activity-based costing method.

Question

An internal auditor found the following information while reviewing the monthly financial statements for a wholesaler of safety glasses: Opening inventory:       1,000 units at $2 per unit Purchased:                 5,000 units at $3 per unit Sold:                          3,000 units at $7 per unit The cost of goods sold was reported at $8,500. Which of the following inventory methods was used to derive this value?
A) Average cost method.
B) First-in, first-out (FIFO) method.
C) Specific identification method.
D) Activity-based costing method.

Quizplus · Accepted Answer

The Answer of An internal auditor found the following information while reviewing the monthly financial statements for a wholesaler of safety glasses: Opening inventory:       1,000 units at $2 per unit Purchased:                 5,000 units at $3 per unit Sold:                          3,000 units at $7 per unit The cost of goods sold was reported at $8,500. Which of the following inventory methods was used to derive this value?
A) Average cost method.
B) First-in, first-out (FIFO) method.
C) Specific identification method.
D) Activity-based costing method.

An Internal Auditor Found the Following Information While Reviewing the Monthly