Which of the Following Inventory Costing Methods Yields the Lowest

question 119

Multiple Choice

Which of the following inventory costing methods yields the lowest cost of goods sold when costs are rising during the accounting period?

• A) Specific-unit-cost
• B) Average-cost
• C) Last-In, First-Out
• D) First-In, First-Out

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Definitions:

Income Source

The origin or means through which an individual, company, or entity earns money.

Utility Function

An expression that captures how a consumer ranks different bundles of goods based on the level of utility or satisfaction each bundle provides.

Labor Income

Earnings from work or employment, including wages, salaries, bonuses, and any other form of payment for labor services.

Budget Constraint

The limitation on the consumption bundles that a consumer can afford based on their income and the prices of goods and services.