Which Costing Method Cannot Be Used to Determine the Cost

question 54

Multiple Choice

Which costing method cannot be used to determine the cost of inventory items before lower-of-cost-or-market is applied?

• A) Specific identification
• B) FIFO
• C) LIFO
• D) All of these methods can be used.

---

Definitions:

Cost of Capital

The rate of return that a company must earn on its investments to maintain its market value and satisfy its shareholders or debtholders.

Future Inflation

Anticipated increase in the price level of goods and services in the future, affecting purchasing power.

Market Risk Premium

The additional return an investor expects from holding a risky market portfolio instead of risk-free assets.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements, often based on the risk of investing in that company's equity.