LIFO, FIFO, & Weighted Average Inventory Methods - CPA Business Environment and Concepts (BEC)
Card 0 of 24
Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
Compare your answer with the correct one above
Assuming constant inventory quantities, which of the following inventory costing methods will produce a lower inventory turnover ratio in an inflationary economy?
Assuming constant inventory quantities, which of the following inventory costing methods will produce a lower inventory turnover ratio in an inflationary economy?
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
Compare your answer with the correct one above
During periods of inflation, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory valuation methods?
During periods of inflation, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory valuation methods?
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
Compare your answer with the correct one above
Which of the following costing methods will yield the lowest inventory value?
Which of the following costing methods will yield the lowest inventory value?
Variable costing typically produces the lowest inventory values since only variable costs are capitalized.
Variable costing typically produces the lowest inventory values since only variable costs are capitalized.
Compare your answer with the correct one above
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Compare your answer with the correct one above
The equivalent units of production method can be calculated by using either:
The equivalent units of production method can be calculated by using either:
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Compare your answer with the correct one above
Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
Compare your answer with the correct one above
Assuming constant inventory quantities, which of the following inventory costing methods will produce a lower inventory turnover ratio in an inflationary economy?
Assuming constant inventory quantities, which of the following inventory costing methods will produce a lower inventory turnover ratio in an inflationary economy?
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
Compare your answer with the correct one above
During periods of inflation, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory valuation methods?
During periods of inflation, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory valuation methods?
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
Compare your answer with the correct one above
Which of the following costing methods will yield the lowest inventory value?
Which of the following costing methods will yield the lowest inventory value?
Variable costing typically produces the lowest inventory values since only variable costs are capitalized.
Variable costing typically produces the lowest inventory values since only variable costs are capitalized.
Compare your answer with the correct one above
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Compare your answer with the correct one above
The equivalent units of production method can be calculated by using either:
The equivalent units of production method can be calculated by using either:
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Compare your answer with the correct one above
Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use?
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
Compare your answer with the correct one above
Assuming constant inventory quantities, which of the following inventory costing methods will produce a lower inventory turnover ratio in an inflationary economy?
Assuming constant inventory quantities, which of the following inventory costing methods will produce a lower inventory turnover ratio in an inflationary economy?
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
In a period of rising prices, the oldest inventory, or the inventory used in FIFO would be the least expensive. Thus, the profit margin would be the largest here.
Compare your answer with the correct one above
During periods of inflation, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory valuation methods?
During periods of inflation, a perpetual inventory system would result in the same dollar amount of ending inventory as a periodic inventory system under which of the following inventory valuation methods?
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
Only under FIFO would the use of a perpetual system result in the same dollar amount of ending inventory as a periodic system.
Compare your answer with the correct one above
Which of the following costing methods will yield the lowest inventory value?
Which of the following costing methods will yield the lowest inventory value?
Variable costing typically produces the lowest inventory values since only variable costs are capitalized.
Variable costing typically produces the lowest inventory values since only variable costs are capitalized.
Compare your answer with the correct one above
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Compare your answer with the correct one above
The equivalent units of production method can be calculated by using either:
The equivalent units of production method can be calculated by using either:
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Compare your answer with the correct one above
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Which of the following costs is deducted from revenues of a manufacturing company in order to determine gross margin, but not deducted from revenues to determine contribution margin?
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Under the absorption approach, all fixed and variable manufacturing overhead is part of cost of goods sold to determine an entity's gross margin.
Compare your answer with the correct one above
The equivalent units of production method can be calculated by using either:
The equivalent units of production method can be calculated by using either:
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Using the FIFO method accounts for work to be finished and using the weighted average method blends the units.
Compare your answer with the correct one above