If Companies Have Identical Inventoriable Costs but Use Different Inventory

question 55

Multiple Choice

If companies have identical inventoriable costs but use different inventory flow assumptions when the cost of goods has not been constant, then the

• A)cost of goods sold of the companies will be identical.
• B)cost of goods available for sale of the companies will be identical.
• C)ending inventory of the companies will be identical.
• D)net income of the companies will be identical.

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Definitions:

Assembly Department

A segment within a manufacturing facility where parts are put together to form a finished product.

Predetermined Overhead Rate

is an estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a specific activity base.

Finishing Department

The final stage in the manufacturing process where products are completed, packaged, and prepared for delivery.

Direct Labor-Hour

A measure of the work time spent by employees who are directly involved in the production process.