Chapter 1 Problem 7-61 to 70 (Multiple Choice)
Problem 7-61 Answer B
Units Unit cost Total cost
January 1 40,000 5 200,000
January 17 (35,000) 5 (175,000)
Balance 5,000 5 25,000
January 28 20,000 8 160,000
Balance 25,000 7.40 185,000
Problem 7-62 Answer D
Units Total cost
January 1 200 300,000
April 3 300 525,000
October 1 500 1,000,000
Total 1,000 1,825,000
Less: Sales (400 + 400) 800
Ending inventory 200
Average unit cost (1,825,000/1,000) 1,825
Cost of inventory (200 x 1,825) 365,000
106
Problem 7-63 Answer C
Units Unit cost Total cost
January 1 8,000 200 1,600,000
8 ( 4,000) 200 ( 800,000)
4,000 200 800,000
20 12,000 240 2,880,000
(3,680,000/16,000 = 230) 16,000 230 3,680,000
Problem 7-64 Answer C
Problem 7-65 Answer B
Estimated selling price 4,050,000
Cost of disposal ( 200,000)
Net realizable value (lower than cost) 3,850,000
Problem 7-66 Answer B
Estimated sales price 4,000,000
Cost to complete (1,200,000)
Net realizable value 2,800,000
FIFO cost (lower than NRV) 2,600,000
Problem 7-67 Answer B
Inventory – January 1 700,000
Purchases 3,300,000
Goods available for sale 4,000,000
Less: Inventory – December 31 600,000
Cost of goods sold before inventory writedown 3,400,000
Loss on inventory writedown 100,000
Cost of goods sold after inventory writedown 3,500,000
Problem 7-68 Answer C
Sales price Fraction Allocated cost
A (100 x 240,000) 24,000,000 24/60 6,000,000
B (100 x 160,000) 16,000,000 16/60 4,000,000
C (200 x 100,000) 20,000,000 20/60 5,000,000
60,000,000 15,000,000
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