In a Period of Increasing Prices, Which Cost Determination Method

question 48

Multiple Choice

In a period of increasing prices, which cost determination method will result in the lowest amount of cash flow?

• A) FIFO
• B) Specific Identification
• C) Average
• D) Cash flow will be the same under all methods.

---

Definitions:

Labor Unions

Organizations representing workers in various industries, advocating for better wages, working conditions, and benefits for their members.

Non-Unionized Industries

Sectors of the economy where the workforce is not part of a labor union or covered by a collective bargaining agreement.

Recession

A phase of short-term economic downturn marked by decreased business and manufacturing operations, typically recognized by a decline in Gross Domestic Product for two consecutive quarters.

Efficiency-Wage Theory

The concept that employers may pay a higher wage than the market equilibrium to increase worker productivity, loyalty, and satisfaction, thereby reducing turnover and shirking.