When applying lower of cost or net realizable value under the FIFO, average cost, or specific identification method, market value a.is defined as the selling price. b.should not exceed the net realizable value plus an allowance for a normal profit margin. c.should not exceed the net realizable value less an allowance for a normal profit margin. d.is defined as the net realizable value.

Q: Cost accounting is used as a means of fixing a selling price. Select one: True False

A: Cost accounting is a method of managerial accounting which is used to calculate the total production…

Q: Which of the following is an assumption of cost-volume-profit analysis? a. The inventory quantities…

A: Whereas fixed costs remain constant, variable costs change in proportion to the volume of…

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: The focus of a sell or process further decision is Select one: a. incremental cost. O b. incremental…

A: Introduction: Incremental cost : Its an extra cost for producing the unit.

Q: How are the floor and ceiling limits calculated as per the lower of cost or market (LCM) method…

A: LCM that is lower of cost or market value method says that inventory should be valued at a price…

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: During a period of steadily rising prices, which of the methods of measuring the cost of goods is…

A: The inventory can be valued using various methods as LIFO, FIFO and weighted average method. The…

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: In your own words explain the meaning of: a. differential revenue, b. differential cost, and c.…

A: In accounting, Differential means the difference between the two alternatives or two output levels,…

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: An example of an expense classifi cation by function is: C . cost of goods sold.

A: Expenses are either classified by nature or by function.

Q: Product profitability is best judged through A. P/v ratio B. Gross profit ràtio C. Operating…

A: The product profitability is referred as the amount of profit which is obtained from product or…

Q: Gross margin is included on the income statement under which format(s)? A) B) C) D) Contribution…

A: Gross Margin is included on the income statement under traditional approach.  Gross Margin = Sales -…

Q: A decrease in Selling and Administrative Expenses woulddirectly impact what ratio?a. Fixed asset…

A: Answer:

Q: Which of the following statement is correct for relevant costs? a. It is avoidable, future and…

A: Relevant cost are those costs which are relevant for decision making. A cost is judged to be…

Q: Mark up can be calculated by the formula; a. Markup = Cost + Expenses b. Markup = Cost + Profit c.…

A: Markup refers to the difference between the selling price of a good or service and its cost

Q: Below is the information on a project that you are evaluating for deciding on its worthiness as an…

A: The question is related sensitivity Anaysis. The details are given

Q: If costs are rising, which of the following will be true?a. The cost of goods sold will be greater…

A:

Q: em. b. the amount of money paid for an item,

A: Opportunity costs are the potential gains that an individual, investor, or corporation foregoes by…

Q: The difference between sales and marginal cost is______________ a. Fixed Cost b. Profit c. Sales…

A: Introduction: Sales price: The price for which the goods are sold called as sales price. Total sales…

Q: Indicate the effects on gross profit the changes in volume, unit selling price, and unit cost. Write…

A: Selling price and sales volume have a direct relationship with the Gross profit i.e. increase in…

Q: Gross profit will result if: O Sales revenues are greater than operating expenses. Operating…

A: Gross profit is the excess of the sales revenue over the cost of goods sold

Q: When allocating the transaction price to performance obligations when a stand-alone selling price is…

A: Introduction:

Q: The “plus” in cost-plus pricing is often referred to as Markup.   Extra profit.   Gross profit.…

A: Cost plus pricing means when selling price is fixed as a addition of profit on the cost price. For…

Q: Which of the following statements is FALSE? a. The mark up is a percentage applied to base cost. O…

A: Markup is the percentage computed on the amount of cost to know the markup applied by the entity on…

Q: Which two economic concepts are fundamental to the relevance of fair values to accounting? i. The…

A: The two economic concepts are fundamental to the relevance of fair values to accounting are…

Q: The accounting principle upon which deferrals and accruals are based is Oa, conservatism Ob.…

A: Accounting principles are those rules and regulations which are being used by accountants all over…

Q: Which of the following statements correctly complete the sentence: "Gross Margin equals": I.…

A: Profitability of the firm is known by various measures like gross profit margin, net profit margin,…

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.