When Valuing Ending Inventory Under a Perpetual Inventory System, the

question 43

Multiple Choice

When valuing ending inventory under a perpetual inventory system, the

• A) valuation using weighted average is the same as the valuation using weighted average under the periodic inventory system.
• B) weighted average cost method requires that a new weighted average unit cost be calculated after every sale.
• C) valuation using FIFO is the same as the valuation using FIFO under the periodic inventory system.
• D) most recent units purchased during the period using FIFO are allocated to the cost of goods sold when units are sold.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the production process, including costs related to running the factory that cannot be directly linked to specific units produced.

Cost Formula

A mathematical equation used to predict costs at different levels of activity, considering both fixed and variable components.

Revenue Variance

The difference between actual revenue earned and the projected or budgeted revenue.

Flexible Budget

A budget designed to adapt according to variations in volume or activity levels.