A Major Advantage of Using the FIFO Process-Costing Method Is

question 61

Multiple Choice

A major advantage of using the FIFO process-costing method is that:

• A) FIFO makes the unit cost calculations simpler
• B) in contrast with the weighted-average method, FIFO is considered GAAP
• C) FIFO provides managers with information about changes in the costs per unit from one period to the next
• D) in the period of rising prices, it leads to lower operating income and lower tax payments, saving the company cash and increasing the company's value

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Definitions:

Contingency Theory

A leadership theory that posits the effectiveness of a leader's style is contingent upon the context and situation, suggesting there is no one best way to lead.

Situational Balance

The state of equilibrium or stability in a particular situation or environment, often achieved through a careful adjustment of different elements or factors.

Cross-cultural

Refers to a field of study that compares the differences and similarities in individual psychological functioning across various cultures and societies.

Socioemotional

Pertaining to the interplay between social processes and emotional states in individuals or groups.