The FASAB Allows Entities to Value Inventories Held for Sale

question 12

Multiple Choice

The FASAB allows entities to value inventories held for sale at which of the following values?

• A) Historical cost, using FIFO.
• B) Historical cost, using weighted average.
• C) Latest acquisition cost.
• D) All of the above.

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Definitions:

Expected Units Sold

The number of units of a product that a company anticipates selling in a particular period based on market research and sales forecasts.

Direct Materials Budget

An estimation of the quantity and cost of direct materials necessary for production, matching the production budget.

Beginning Inventory

The value of goods available for sale at the start of an accounting period.

Production Needs

The requirements necessary to manufacture products, including materials, labor, and machinery.