Under Which of the Following Inventory Costing Methods Is Ending

question 117

Multiple Choice

Under which of the following inventory costing methods is ending inventory based on the cost of the oldest purchases?

• A)Last- In, First- Out
• B)Average- cost
• C)First- In, First- Out
• D)Specific- unit- cost

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Definitions:

Monthly Interest Rate

The interest rate applied to a loan or investment, calculated to reflect the monthly compounding period.

Variable Cost

Costs that vary directly with the level of production or sales, such as materials and labor.

Sales Price

The amount of money a buyer pays to purchase a good or service from a seller.

Economic Order Quantity

The ideal order size that minimizes the total costs associated with ordering and holding inventory.