In a Period of Increasing Prices, Which Cost Determination Method

question 138

Multiple Choice

In a period of increasing prices, which cost determination method will result in the lowest amount of cash flow?

• A) FIFO
• B) specific identification
• C) weighted average
• D) Cash flow will be the same under all methods.

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Definitions:

Income Elasticity

A measure of how the quantity demanded of a good responds to a change in consumers' income.

Voice Mail

An electronic communication system that allows users to leave voice messages for others to retrieve later.

Disposable Income

The amount of money that households have available for spending and saving after income taxes have been accounted for.

Marginal Revenue

The additional income generated by selling one more unit of a good or service.