Which of the Following Inventory Costing Methods Is Based on the Actual

question 57

Multiple Choice

Which of the following inventory costing methods is based on the actual cost of each particular unit of inventory?

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

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Definitions:

Safety Stock

A quantity of inventory kept on hand as a precaution against fluctuations in demand or supply, ensuring the mitigation of stockout risks.

Pull Method

A manufacturing and inventory strategy where production is based on customer demand rather than forecasting.

Work-In-Process Inventory

Goods that are in various stages of the production process but are not yet completed.

Non-Value-Added Cost

Expenses that do not contribute to the value or functionality of a product or service, often targeted for reduction or elimination.