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:

Earnings per Share

A financial metric calculated by dividing a company's net income by the number of outstanding shares, indicating how much profit a company makes per share of stock.

Fixed Cost Sources

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Financial Risk

The chance of incurring financial losses from an investment or business activity.

Operating Leverage

A measure that shows how revenue growth translates into growth in operating income, highlighting the impact of fixed costs.