Which of the Following Is a Method of Computing Inventory

question 7

Multiple Choice

Which of the following is a method of computing inventory that small firms tend to use to save taxes when prices rise?

• A) First-in, first-out method
• B) Last-in, first-out method
• C) Average-cost method
• D) Direct tax method

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Definitions:

Total Output

The complete quantity of goods or services produced in a specific time period by an economy or firm.

Labor Prices

The wages or compensation paid to employees for their labor or work performed.

Profit-maximizing Firm

A company that seeks to achieve the highest possible profit through its operations, focusing on revenue enhancement and cost reduction.

Units of Labor

Refers to the measurement of labor force involvement, typically in terms of person-hours or person-years.