Ace Company Is a Retailer Operating in an Industry That

question 89

Multiple Choice

Ace Company is a retailer operating in an industry that experiences inflation (rising prices) . Ace wants the most realistic net income. Which inventory costing method should Ace consider using?

• A)Average because all inventory costs will then represent an average amount.
• B)Specific identification is the most realistic method because it involves the actual costs.
• C)LIFO because cost of goods sold represents the latest costs.
• D)FIFO because cost of goods sold represents the earliest costs.

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Definitions:

Leadership Executive Training

Specialized programs designed to enhance the leadership skills and strategic thinking of senior executives and leaders.

Quality Management Analyst

A professional who assesses and analyzes the quality management systems of an organization to ensure compliance with standards and to identify opportunities for improvement.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, resulting in a decreased cost per unit.

Long-run Average Total Cost

The long-run average total cost is the per-unit cost of production when all inputs can be adjusted, reflecting the most cost-efficient scale of operation.