Question

Exercise 4-7a (Static): Determine the cost of inventory. LO 4-2, 4-3, 4-4.

Answer 1

To determine the cost of inventory, add up the cost of each item in the basket. You can calculate the cost of a textbook with a specific number of pages by multiplying the cost per page by the number of pages.

Step-by-step explanation:

To determine the cost of inventory, you need to calculate the total cost of buying the basket in each time period. The cost of inventory is the sum of the purchase cost of all the items in the basket. Using the information given in the table, you can add up the cost of each item to get the total cost of inventory.

For example:

a. If the cost of each page in the textbook is $1.50, the cost of the textbook with 400 pages would be 400 * $1.50 = $600.

b. If the cost of each page in the textbook is $1.50, the cost of the textbook with 600 pages would be 600 * $1.50 = $900.