Which of the Following Should a Business Consider When Choosing

question 8

Multiple Choice

Which of the following should a business consider when choosing between the FIFO and average cost formulas?

• A)whether the method closely follows the physical flow of goods
• B)whether the method reports an inventory cost that approximates recent cost
• C)using the same method for inventory of similar nature and use
• D)all of the above.

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Definitions:

Opportunity Cost

Overlooking potential advantages by settling on a single alternative.

Sandwiches

A food item typically consisting of two pieces of bread with meat, cheese, vegetables, or other fillings between them.

Production Possibilities Curve

A graphical representation showing the maximum number of goods or services that can be produced using limited resources.

Efficiently

Performing or functioning in the best possible manner with the least waste of time and effort, ensuring productivity and effectiveness.