A Major Criticism of the LIFO Method Is That It

question 118

True/False

A major criticism of the LIFO method is that it magnifies the effects of the business cycle on business income.

---

Definitions:

Direct Labor Standards

Direct Labor Standards define the expected labor time and cost necessary to produce a unit of product, facilitating budgeting and performance evaluation.

Work in Process

Inventory category that includes items currently being manufactured but not yet completed.

Standard Cost System

A standard cost system is an accounting method that uses cost estimates to predict the cost of production under normal conditions.

Direct Materials

Raw materials that are directly traceable to the finished product.