During a period of steadily rising prices, which of the following methods of measuring the cost of goods sold is likely to result in reporting the highest gross profit? A. LIFO. B. Average-cost. C. FIFO. D. Specific identification.

During a period of steadily rising prices, which of the following methods of measuring the cost of goods sold is likely to result in reporting the highest gross profit? A. LIFO. B. Average-cost. C. FIFO. D. Specific identification.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 3DQ: How do you calculate the markup on cost of goods sold? Is the markup pure profit? Explain.

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Expert of general account solve asap

During a period of steadily rising prices, which of the following methods
of measuring the cost of goods sold is likely to result in reporting the
highest gross profit?
A. LIFO.
B. Average-cost.
C. FIFO.
D. Specific identification.

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Correct answer
During a period of steadily rising prices, which of the methods of measuring the cost of goods is likely to result in the lowest taxable income? Last-in, first-out (LIFO) First-in, first-out (FIFO) Specific identification Average cost
During periods of rising costs, which inventory costing method produces the highest gross profit?
Under the gross profit method, if the gross profit rate is based on cost, the cost of sales is computed as A. Gross sales times cost ratio B. Net sales divided by sales ratio C. Net sales times cost ratio D. Gross sales divided by sales ratio