If the Cost of Materials Decreased from June to July

question 18

Multiple Choice

If the cost of materials decreased from June to July, which of the following statements would be true? (Assume all other factors are held constant.)

• A)Only the FIFO method would result in a decrease in the unit cost for July.
• B)Only the weighted average method would result in a decrease in the unit cost for July.
• C)Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the FIFO method would result in a lower unit cost for units in July than the weighted average method.
• D)Both the weighted average method and the FIFO method would result in a decrease in the unit cost for July; however, the weighted average method would result in a lower unit cost for units in July than the FIFO method.

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Definitions:

Cost Accounting System

A system of accounting for the recording, analysis, and allocation of costs associated with a company's production processes.

Northern Division

A designated segment or area of operations within a larger organization, often defined geographically.

Part X2

A specific component or item, designated as "X2," which is part of a larger product or system.

Minimum Acceptable Price

The lowest price at which a party is willing to sell a product or service, often covering at least the costs of production.