Which Inventory Pricing Method Best Approximates Specific Identification in Most

question 34

Multiple Choice

Which inventory pricing method best approximates specific identification in most manufacturing situations?

• A) Activity-based costing
• B) FIFO
• C) Average cost
• D) LIFO

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Definitions:

PI

A mathematical constant approximately equal to 3.14159, representing the ratio of a circle's circumference to its diameter; if the context is finance, PI could refer to Profitability Index, indicating the ratio of payoff to investment for a project.

Profitability Index

A financial tool that calculates the relationship between the costs and benefits of a project by dividing the present value of future cash flows by the initial investment.

Limited Funds

A condition where resources, especially money, are finite or restricted in availability.