Which of the Following Inventory Costing Methods Is Based on the Actual

question 145

Multiple Choice

Which of the following inventory costing methods is based on the actual cost of each particular unit of inventory?

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

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Definitions:

Variable Cost

Variable costs are expenses that vary directly with the level of production or business activity, such as raw materials and direct labor.

Income Increase

Income increase refers to the rise in earnings over a period, which could be due to various factors such as revenue growth, cost reduction, or operational efficiency improvements.

DuPont Formula

A financial ratio based formula that measures a company's return on equity by multiplying its net profit margin, asset turnover, and financial leverage.

Investment Turnover

A ratio that measures the efficiency with which a company is able to generate revenue from its investments in assets.