These are sample practice MCQs created for exam preparation. These are NOT official exam questions.
INVENTORY MANAGEMENT: What is the value of ending inventory? (1) Beginning inventory was $840K, purchases during period were $2.16M, and COGS was $2.28M (2) Inventory turnover ratio is 3.5 and annual COGS is $2.28M
Question:
INVENTORY MANAGEMENT: What is the value of ending inventory? (1) Beginning inventory was $840K, purchases during period were $2.16M, and COGS was $2.28M (2) Inventory turnover ratio is 3.5 and annual COGS is $2.28M
INVENTORY MANAGEMENT: What is the value of ending inventory? (1) Beginning inventory was $840K, purchases during period were $2.16M, and COGS was $2.28M (2) Inventory turnover ratio is 3.5 and annual COGS is $2.28M
Options
Answer: (A) Statement (1) ALONE is sufficient, but statement (2) alone is not sufficient
Explanation:
Statement (1): Ending inventory = $840K + $2.16M - $2.28M = $720K. Sufficient. Statement (2): Inventory turnover = COGS/Avg Inventory. Average inventory = $2.28M/3.5 = $651K. However, this gives average, not ending inventory. Insufficient.
Explanation:
Statement (1): Ending inventory = $840K + $2.16M - $2.28M = $720K. Sufficient. Statement (2): Inventory turnover = COGS/Avg Inventory. Average inventory = $2.28M/3.5 = $651K. However, this gives average, not ending inventory. Insufficient.
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