If the Company Uses the LIFO Method, What Is the Cost

question 34

Multiple Choice

If the company uses the LIFO method, what is the cost of its ending inventory?

• A) $24
• B) $42
• C) $58
• D) $76

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Definitions:

Machine-Hours

The total hours that machines are operated in the production process, used as a basis for allocating manufacturing overhead to products.

Cost Of Goods Sold

The total cost directly involved in producing goods or services sold during a specific period.

Predetermined Overhead Rate

A rate calculated before a period begins, used to apply overhead costs to products based on a certain activity such as labor hours or machine hours.

Machine-Hours

A measure of the amount of time machines are operating in the production process, often used to allocate manufacturing overhead costs.