When Inventory Costs Are Declining, Which of the Following Inventory

question 105

Multiple Choice

When inventory costs are declining, which of the following inventory costing method will result in the lowest ending merchandise inventory?

• A)First-in, first-out
• B)Last-in, first-out
• C)Weighted-average
• D)Specific identification

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Definitions:

Factory Wages Payable

An account representing the amounts owed to manufacturing personnel for wages that have been earned but not yet paid.

Work in Process Inventory

Goods in manufacturing that are partially completed; not yet ready for sale but more advanced than raw materials.

Direct Material Usage

The quantity of raw materials or supplies consumed in the production of goods or services.

Raw Materials Inventory

The total cost of all components and materials stored that are intended to be used in production.