The Specific Identification Method of Costing Inventories Is Used When

question 81

Multiple Choice

The specific identification method of costing inventories is used when the

• A)physical flow of units cannot be determined.
• B)company sells large quantities of relatively low cost homogeneous items.
• C)company sells large quantities of relatively low cost heterogeneous items.
• D)company sells a limited quantity of high-unit cost items.

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Definitions:

Critical Value

A threshold in statistics that a test statistic must exceed to reject a null hypothesis; it delineates the boundaries of the critical region.

Variances

The differences between planned or expected results and actual outcomes in budgeting and accounting.

Material Price Variances

The difference between the actual cost of materials and the expected or budgeted cost of materials in production processes.

Materials Account

An account used to track the costs of raw materials that are either in stock or being used in production processes.