During periods of increasing costs, the use of the FIF0 method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method. True False
Q: AD, Inc. uses the LIFO-lower of cost or market method to value inventory. If the inventory value is…
A: For financial reporting purposes, will value the inventory in accounting at lower prices or on the…
Q: During a period of steadily rising costs, the inventory valuation method that yields the highest…
A: LIFO: Last in First Out- Under LIFO inventory valuation, units purchased last are sold first. As the…
Q: What is the cost of ending inventory under the weighted average costing method?
A: Calculation of cost of units issued under FIFO method: Date Units issued Issue cost 5/15…
Q: Under the LIFO cost flow assumption during a period ofinflation, which of the following is false? A.…
A: Inflation and cost of goods sold - a company selling goods during periods of inflation will see an…
Q: Based on the following data, make a comparison between the use of the flow of inventory costs…
A: FIFO: Under this method, the inventory that is bought first is to be sold first. Thus the ending…
Q: If inventory is being valued at cost and the price level is steadily rising, which of the three…
A: Inventory can be defined as a form of asset which is held by a business firm for resale purposes.…
Q: Can you explain why the answer is B and not C. If inventory prices are decreasing wouldnt LIFO…
A: Yes, you are right in the falling inventory prices, the LIFO method would result in the selling of…
Q: When inventory unit costs are increasing: Group of answer choices a)FIFO will result in higher…
A: FIFO refers to the method of inventory costing where items purchased first are sold first.
Q: 2 Calculate ending inventory using the lower of cost and net realizable value.
A: The Inventory is recorded at cost or NRV in the financial position so that inventory is valued…
Q: Please answer in detail and tell me why other options are incorrect........ The most useful…
A: Following methods are used to find the valuation of the ending inventory 1) FIFO - First in first…
Q: In times of decreasing prices, LIFO will result in ____ costs of goods sold and _____ ending…
A: FIFO: FIFO stands for First-In, First-Out. In this method inventory purchased first will be sell…
Q: For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount…
A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…
Q: In comparing the absorption and variable cost methods, each of the following statements is true…
A: Variable Costing: The variable costing is a method used to allocate the fixed manufacturing overhead…
Q: Under the lower of cost or market inventory valuation rule, market value of inventory is defined as:…
A: Market value is the price of an item/product prevailing in the market on the given date.
Q: The number of units that a company should add to inventory with each order to minimize the total…
A:
Q: In a period of rising prices, the inventory cost allocation method that tends to result in the…
A: In the period of rising prices, method resulting in highest net income would be the method under…
Q: Give examples of costs included in annual carrying costs of inventory when using the EOQ decision…
A:
Q: If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of…
A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…
Q: Under EOQ approaches, order costs can be minimised by placing large, infrequent orders for…
A: GIVEN Under EOQ approaches, order costs can be minimised by placing large, infrequent orders for…
Q: An advantage of the weighted average inventory method is that it smooths out erratic changes in…
A: Inventory accounting is the branch of accounting concerned with the valuation and accounting for…
Q: In some instances, accounting principles require a departure from valuing inventories at cost alone.…
A: Accounting principles refers to rules and regulations which are followed when financial data is…
Q: For all short exercises, assume the perpetual inventory system is used unless stated otherwise.…
A: Inventory Costing Method: Under inventory costing method, the flow of cost of inventory is…
Q: Smmons Inc. uses the lower of cost on meket method to valesinventory that is accounted or using he…
A: Inventory valuation method includes: First-in, First-Out (FIFO) Last-in, Last-Out (LIFO) Average…
Q: During a period of rising inventory costs and stable output prices, describe how net income and…
A: First in first out Method (FIFO) First in first out method is one of the popular method which was…
Q: Zimt AG uses the FIFO method, and Nutmeg Inc. uses the LIFO method. Compared tothe cost of replacing…
A: If a company follows FIFO method, then the inventory will go based on first in first out. If a…
Q: hen purchase costs regularly rise, the inventory costing method that yields the highest reported net…
A: The inventory can be valued using various methods as LIFO, FIFO, average and specific identification…
Q: If costs are rising, which of the following will be true?a. The cost of goods sold will be greater…
A:
Q: (b) Will the results in (a) be higher or lower than the results under FIFO and LIFO? Ending…
A: Ending inventory is 100 units at the end of June. So the cost of ending inventory as per following…
Q: CVP analysis makes all of the following assumptions except a change in volume is the only…
A: In order for a CVP analysis to be accurate, certain assumptions must be met. These assumptions are:…
Q: In the immediate write-off approach, under-applied overhead is regarded as: a. an increase in…
A: Underapplied overhead occurs when a company's overhead expenses surpass what it budgets for in order…
Q: Which inventory costing method results in the lowest net income during a period of rising inventory…
A: In case of LIFO method, most of the cost of goods sold is calculated at the latest price since the…
Q: Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing…
A: Perpetual Inventory System is an accounting system of valuing the inventory where there is a need…
Q: Which of the following statements related to the application of the lower of cost and net realizable…
A: Option B is correct
Q: During periods of rising costs, which inventory costing method produces the highest gross profit?
A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…
Q: Ross Electronics has one product in its ending inventory. Per unit data consist of the following:…
A: Given:
Q: In comparing the absorption and variable cost methods, each of the following statements is true…
A: Variable Costing:The variable costing is a method used to allocate the fixed manufacturing overhead…
Q: In some instances, accounting principles require a departure from valuing inventories at cost alone.…
A: Lower-of-cost-or-market value: The lower-of-cost-or-market value is a method which requires the…
Q: Which cost flow assumption generally results in the highest reported amount for ending inventory…
A: First-in-First-Out method: In First-in-First-Out method, the costs of the initially purchased items…
Q: Which cost flow assumption generally results in the highest reported amount of net income in periods…
A: Solution: Under FIFO method, inventory is valued at latest purchase cost. Therefore in period of…
Q: .When applying the lower of cost or net realizable value (LCNRV) method, inventory value reported…
A: As per the lower of cost or net realizable value (LCNRV) method, inventory should be recognized at…
Q: The costs of ending inventory is similar under both periodic and perpetual inventory system if…
A: The given question is related to inventory valuation. The first method of inventory valuation is the…
Q: Instructions: 1. Compute the estimated cost of ending inventory using the conservative approach 2.…
A: Particulars Cost Retail Beginning inventory 650,000 1,200,000 Add: Net Purchases (Purchase -…
Q: Which of the following statements about the margin of safety is (are) correct? a. producing units…
A: Margin of safety is difference between actual sales and break even sales. Sales of more units…
Q: Which cost flow assumption generally results in the highest reported amount of net income when…
A: FIrst in first out or FIFO cost flow assumption provides highest net income when inventory prices…
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- Baxter Corporation has been using FIFO during a period ofrising costs. Explain whether you would expect each of the following measurements to be higher or lower if the com-pany had been using LIFO. a. Net income.b. Inventory turnover rate.c. Income taxes expense.Explain why, in the traditional view of inventory, carrying costs increase as ordering costs decrease.3. The carrying value of ending inventory under variable costing would be: _________. Present as is if higher or present it in parenthesis if it is less ex: (200) 4. Under absorption costing, the cost of goods sold would be:
- 1. What is the value of ending inventory using the variable costing method?If costs are rising, which of the following will be true?a. The cost of goods sold will be greater if LIFO is usedrather than weighted average.b. The cost of ending inventory will be greater if FIFO isused rather than LIFO.c. The gross profit will be greater if FIFO is used ratherthan LIFO.d. All of the above are trueThe inventory cost computed under absorption costing is ____ the inventory cost computed using variable costing. Group of answer choices half of thrice as much equal to greater than
- The carrying value of ending inventory under variable costing would be:A. P1,400 higher than under absorption costing B. P1,400 less than under absorption costing C. P800 less than under absorption costingD. the same as under absorption costingInventory values calculated using variable costing as opposed to absorptioncosting will generally be: a. Lessb. Equalc. Greaterd. Twice as muchInventory costing method that treats all mfg cost, direct and indirect, FC or VC, as inventoriable cost. • Full costing • Variable costing • Marginal costing • Cost accounting • None of the above
- Which of the following is an assumption of cost-volume-profit analysis? a. The inventory quantities during the period can change. b. Within the relevant range of operating activity, the efficiency of operations can change. c. Costs can be divided into fixed and variable components. d. The sales mix can vary. 5 Which of the following is an assumption of cost-volume-profit analysis? a. The inventory quantities during the period can change. b. Within the relevant range of operating activity, the efficiency of operations can change. c. Costs can be divided into fixed and variable components. d. The sales mix can vary.In a single period inventory model, it is optimal to order MORE than the expected demand if the cost of having a shortage is greater than the cost of having a surplus. True FalseWhich of the following is NOT true regarding an income statement organized according to thecontribution margin approach? Question 6 options: The contribution margin income statement is organized by cost behavior. Operating income will always be the same as operating income in a traditional income statement regardless of changes in inventory levels. All fixed costs, including fixed MOH, are expensed below the contribution margin line. The contribution margin is equal to sales revenue minus variable expenses.