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.

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Definitions:

Strict Liability

A legal standard that holds parties responsible for damages or injuries caused by their actions or products, regardless of fault or intent.

Unreasonably Dangerous Products

Products that pose a risk of injury to the consumer beyond what would be expected through typical use.

Construction Projects

Planned undertakings involving the erection, renovation, or demolition of a structure or infrastructure.

Causation Link

The relationship or connection between an act and its effect, often used in legal contexts to establish liability or fault by demonstrating how one event directly leads to another.