Question

Anton Co uses the perpetual inventory system and FIFO cost flow. If Anton purchased 400 units of inventory that cost $12 each, what is the total cost?

a) $4,800
b) $4,200
c) $4,000
d) $5,000

Answer 1

The total cost of the inventory Anton Co purchased is calculated by multiplying the number of units (400) by the cost per unit ($12), resulting in $4,800.Therefore, the correct answer is a) $4,800.

Step-by-step explanation:

To determine the total cost of inventory Anton Co purchased using a perpetual inventory system and FIFO cost flow, we need to simply multiply the number of units bought by the cost per unit.

In this case, Anton Co purchased 400 units of inventory at a cost of $12 each.

The total cost calculation is as follows:

Number of units purchased: 400 units

Cost per unit: $12

Total Cost = Number of units × Cost per unit = 400 × $12 = $4,800

Therefore, the correct answer is a) $4,800.