When using the periodic fifo inventory cost method, which of the following statements is correct?
a. the cost of merchandise sold is made up of the earliest purchases.
b. the physical count determines the inventory on hand.
c. the cost of merchandise on hand is made up of the most recent costs.
d. all of these choices are correct.

D) All of these choices are correct.

Explanation:

FIFO inventory cost method refers to first in, first out. The cost of goods sold is calculated using the oldest merchandise in stock. In other words, the oldest merchandise should be sold first. The FIFO costing method can be used in either perpetual or periodic inventory systems. It is very useful in economies with low inflation rates, since the price of goods don't a lot during the year (e.g. US economy).

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation: