Which of the Following Statements Is True of Process Costing

question 87

Multiple Choice

Which of the following statements is true of process costing?

• A) In the period of rising prices, weighted-average process-costing method will result in higher operating income as compared to FIFO process-costing method.
• B) The operating income and the tax payments of a company are not affected by the method of process-costing being followed by the company.
• C) In the period of rising prices, weighted-average process-costing method will result in lower cost of goods sold as compared to FIFO process-costing method.
• D) In a period of falling prices, weighted-average process-costing method will increase tax payments as compared to FIFO process-costing method.

---

Definitions:

De Minimis Benefit

A small or insignificant benefit provided by employers to employees that is tax-exempt, such as the occasional use of a company vehicle.

Administratively Impractical

A situation or condition that is so difficult or complicated to manage or implement from an administrative point of view that it is practically impossible.

Welfare Payments

Government financial aid provided to individuals or families in need, for living expenses and basic needs.

Reported

The act of declaring or disclosing income, transactions, or other financial information to tax authorities.