Which of the Following Statements About the FIFO Cost Formula

question 15

Multiple Choice

Which of the following statements about the FIFO cost formula is true?

• A)The same costs per unit are assigned to the ending inventory and the cost of goods sold.
• B)Companies prefer to use FIFO because it lowers their tax liability.
• C)In times of rising prices FIFO will produce a higher net income than weighted-average.
• D)In time of rising prices FIFO produces an inventory cost per unit that is lower than the cost per unit of cost of goods sold.