Which of the Following Inventory Costing Methods Yields the Highest

question 43

Multiple Choice

Which of the following inventory costing methods yields the highest cost of goods sold during a period of rising inventory costs?

• A) specific identification
• B) weighted-average
• C) last-in, first-out
• D) first-in, first-out

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Definitions:

Budget Variance

The difference between budgeted figures for a set period and the actual figures achieved.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated for the actual level of activity.

Unfavorable

A term used in budgeting and variance analysis to describe a situation where actual costs are higher than expected or budgeted costs.

Favorable

A term used in accounting and finance to describe a situation or variance that results in a better-than-expected financial outcome.