An Inventory Cost Formula in Which the Oldest Costs Incurred

question 164

Multiple Choice

An inventory cost formula in which the oldest costs incurred rarely have an effect on the ending inventory valuation is

• A) FIFO.
• B) moving-average cost.
• C) LIFO.
• D) weighted average.

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Definitions:

Variable Costing

A costing method where only variable costs are considered when determining the cost of goods sold, excluding fixed overhead.

Operating Income

The profit produced from a company's regular business operations, excluding non-operating income and expenses like interest and taxes.

Year 1

Typically, refers to the first year in a given context, such as the first year of operations, first fiscal year, or first year of data collection.

Operating Income

The profit earned from a firm's normal core business operations, calculated before the deduction of interest and taxes.