When a Company Uses LIFO,the Cost of Goods Sold Correlates

question 114

True/False

When a company uses LIFO,the Cost of goods sold correlates to the most recently purchased goods,and the ending inventory correlates to the oldest goods in stock.

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Definitions:

Variable Cost Per Unit

A cost that changes with the level of output or sales, directly proportional to the amount of goods or services produced.

Earnings Before Interest And Taxes

Also known as EBIT, it measures a company's profitability before deducting interest and income tax expenses.

Depreciation Expense

Spreading out the price of a tangible asset over the period it can be used.

Variable Cost

The costs that vary directly with the level of production or with the volume of services provided.