Which of the Following Inventory Costing Methods Uses the Cost

question 49

Multiple Choice

Which of the following inventory costing methods uses the cost of the oldest purchases to compute the cost of goods sold?

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

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Definitions:

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to related products and services based on the activities they require.

Overhead Cost

The ongoing expenses of operating a business that are not directly tied to the production of goods or services, such as rent and utilities.

Product Line

A group of related products under a single brand sold by the same company.

Facility Level Activity

Operations and processes that support the overall functioning of a facility, but are not directly tied to the production of goods or services.