Which Inventory Pricing Method Best Approximates Specific Identification in Most

question 34

Multiple Choice

Which inventory pricing method best approximates specific identification in most manufacturing situations?

• A) Activity-based costing
• B) FIFO
• C) Average cost
• D) LIFO

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Definitions:

Postponement

A strategy that involves delaying production or shipment processes to closer match demand, enhancing flexibility and reducing inventory costs.

Profits Increase

The rise in net earnings resulting from operations and business activities.

Unpredictable Demand

Variability in customer demand patterns that cannot be accurately forecasted, posing challenges for inventory management and planning.

Not Positively Correlated

Refers to a statistical relationship between two variables where one variable does not necessarily increase as the other increases or decreases as the other decreases.