The Inventory Costing Method That Smoothes Out Changes in Costs

question 100

Multiple Choice

The inventory costing method that smoothes out changes in costs is

• A)FIFO.
• B)LIFO.
• C)Weighted average.
• D)Specific identification.

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Definitions:

Financial Leverage

Applying borrowed resources to escalate the potential profits of an investment.

EPS

Earnings Per Share, a measure of a company's profitability that divides its net profit by the number of outstanding shares.

ROE

Return on Equity; a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how efficiently a company uses its assets to generate profit.

ROCE

Return on Capital Employed, a financial ratio that measures a company's profitability and the efficiency with which its capital is used.