Which of the Following Is Not an Acceptable Inventory Cost

question 83

Multiple Choice

Which of the following is not an acceptable inventory cost method?

• A)first-in, first-out
• B)last-out, first-in
• C)specific-unit-cost
• D)weighted-average cost

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Definitions:

Variable Manufacturing Overhead

Variable manufacturing overhead comprises costs that fluctuate with production volume, such as utilities and materials used in the production process.

Fixed Manufacturing Overhead

Costs associated with production that do not vary with the level of output, such as salaries of production managers and depreciation of equipment.

Machine-Hours

A measure of production time, representing the total hours worked by machines in the manufacturing process, often used to allocate manufacturing overhead to products.

Markup

The extra sum included in the buying price of items to account for operational expenses and profit, which establishes the sales price.