Which Statement Is Correct About the Specific Identification Method

question 129

Multiple Choice

Which statement is correct about the specific identification method?

• A)It is prone to earnings management if used for distinguishable items.
• B)This method is most appropriate for low-value inventory items.
• C)It is inexpensive to maintain inventory records under this method.
• D)This method is most appropriate for high-value inventory items.

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Definitions:

Added To Production

Refers to the materials, labor, or overhead costs that are incorporated into the manufacturing process to produce goods.

Process Costing

A costing method typically used in industries where production is continuous, assigning costs to units of product based on the processes or stages they go through.

Conversion Costs

The costs associated with converting raw materials into finished goods, including direct labor and manufacturing overhead.

Work in Process Inventory

Items in production that are not yet completed, representing a portion of inventory that is between raw materials and finished goods.