At a Time of Declining Prices,which Cost Flow Assumption Will

question 78

Multiple Choice

At a time of declining prices,which cost flow assumption will result in the highest ending inventory?

• A)Weighted average
• B)FIFO
• C)LIFO
• D)Either weighted average or FIFO

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Definitions:

Fixed Budgets

A financial plan that does not change, regardless of any variations in business activity levels.

Variable Overhead Efficiency Variance

A measure used in managerial accounting to assess the efficiency of variable overhead resource utilization, comparing the actual costs incurred to what should have been incurred at a given level of production.

Unfavorable

A term used to describe outcomes or variances that are negative for a business, such as lower sales or higher costs than expected.

Favorable

A term denoting a financial result that is better than expected or budgeted.