Use the Following Information for the Month of July for Questions

question 73

Multiple Choice

Use the following information for the month of July for questions
ABC Inc.uses the FIFO cost formula in a perpetual inventory system.

-If ABC Inc.used the average cost formula instead of FIFO, gross profit from the July 8 sale would be

• A)higher.
• B)lower.
• C)the same.
• D)cannot be determined.

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Definitions:

Costs Added

Additional costs incurred during a production process or project phase, including materials, labor, and overhead expenses that were not initially anticipated.

Cost Reconciliation

The process of verifying the amount of costs in various accounts and reports, ensuring consistency and accuracy across financial records.

Manufacturing Activity

The process or actions involved in converting raw materials into finished goods through labor and use of machinery.

Materials

refers to the raw items and components required in the production of goods, ranging from metals and plastics to textiles and electronics.