Because the Weighted Average and FIFO Methods Treat Beginning Inventory

question 68

Multiple Choice

Because the weighted average and FIFO methods treat beginning inventory differently, if a firm has beginning inventory in a process costing system and the FIFO method is used, it will:

• A) Always have a higher number of equivalent units of production for conversion costs than weighted the average method
• B) Always have a lower number of equivalent units of production for conversion costs than the weighted average method
• C) Always have a higher cost per equivalent unit than the weighted average method for materials
• D) Always have a lower cost per equivalent unit than the weighted average method for conversion costs

---

Definitions:

Phantom Stock Plan

A form of long-term incentive that gives employees potential financial benefits, simulating stock ownership without granting actual stocks.

Company Stock

Shares of ownership in a corporation, offering a means for corporations to raise capital and for investors to potentially profit from the company's success.

Employee Involvement

The degree to which employees are allowed to participate in decision-making processes within their workplace, leading to increased job satisfaction and productivity.

Family of Measures

A collection of metrics or indicators used collectively to assess various dimensions or components of an organization's performance, acknowledging that no single measure can capture the complexity of organizational effectiveness.