During periods of rising prices, which method (FIFO-LIFO-AVCO) results in the highest gross profit? Why?

Q: 1. When applying lower of cost or market, market value A. is defined as the selling price B.…

A: This Net realizable value(NRV) generally a common method used in valuation of an asset in inventory…

Q: How does the lower of cost or market relate to profit margins?

A: Answer: The lower cost or market implies that, depending on how historical costs and market costs…

Q: Contrast the income statement effect of LIFO versus FIFO(on Cost of Goods Sold and Gross Profit)…

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: Which method results in a more realistic amount for income because it matches the most current costs…

A: The current costs is based on the purchasing of the latest products which means the having book…

Q: When selling price is constant and variable costs increases. What will be the effect to the net…

A: In the given example, it is assume that selling price is constant in both the cases and variable…

Q: As compared with the FIFO method of costing inventories,does the LIFO method result in a larger or…

A:

Q: Profit volume ratio is used for the calculation of: Select one: O a. Profit at given sales O b.…

A: The profit volume ratio is also known as contribution margin ratio.

Q: On a cost-volume-profit graph, when the Total Cost line is higher than the Total Revenue line, the…

A: Solution:- Cost-volume-profit graph is the graph which measures the loss, profit and break-even…

Q: Which of the following would be considered as a limiting factor to maximize the profit? O a. Book…

A: Limiting factors can be defined as the constraints in availability of production resources in order…

Q: Define return on sales ( or profit margin).

A: Financial ratios represent the accounting ratios computed by the management by using elements of…

Q: Which of the following is an opportunity cost? marginal cost cost of sales O lost sales cost of…

A: Introduction: Opportunity cost: Cost for the opportunity lost called Opportunity cost.

Q: Which of the following performance measures will increase if inventory decreases and all else…

A: Return on investment measures the net earned on the assets employed by the business.

Q: What does the price earning ratio indicate?

A: Price to earnings ratio (P/E ratio) compares the price with earnings per share. It will be…

Q: Let P(x) be the annual profit for a certain product, where x is the amount of money spent on…

A: Solution- (A)  P(o) represents the amount of annual profit allocated when x=0 or when no money was…

Q: Sales Returns and Allowances is increased when an employee does a good job. goods are sold on…

A: Introduction Allowance is a defined amount of financial or monetary advantage provided by the…

Q: Which of the following statements is true? OA. When a large proportion of income is spent on a…

A: To find: which of the following statement is true

Q: Mazoon Company has decided to keep the items in the sales division based on their nature such as…

A: Business has several department and function are there.  Each department has its own responsibility…

Q: Is the cost of sales under weighted average always greater than the cost of sales in FIFO?

A: as FIFO method of inventory valuation goods purchased first will be used first or sold first. The…

Q: Which of the following is the indicator of the rate at which company is earning profit? Select one:…

A: Ratio Analysis Each  items in the financial statements of an enterprise is compared by using ratio…

Q: The difference, (Total Revenue - Total Cost) or [(Unit Price x Quantity Sold) - (Fixed Variable…

A: Income statement is a financial statement that shows profitability, total revenue and total…

Q: Which tool can be used to easily calculate the change in profit resulting from a change in sales…

A: Cost-volume-profit analysis: Cost-Volume-Profit Analysis (CVP analysis), also commonly referred to…

Q: what is the significance of break-even chart and profit volume chart

A: break even chart shows the point(the number of units to be sold) at which total revenue is equal to…

Q: What does it mean to have a Price- earnings ratio that is higher or lower than the norm?

A: Price-earnings ratio (P/E ratio) = price per share/earnings per share

Q: Which method would produce the same unit cost for Inventory and Cost of Good Sold in periods of…

A: In periods of rising prices, the method that would generally result in the same unit cost for…

Q: Which of the following option shows the rate at which company is earning profit? Select one: a. All…

A: The question is multiple choice question. Required  Choose the Correct Option.

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.