Which one of the following is not a disadvantage of the specific identification method of inventory costing? a. It allows manipulation of profits b. It does not match expenses against revenues c. It is too expensive to use in complex manufacuring situations d. It is only practical where units are costly and easily distinguishable

Which one of the following is not a disadvantage of the specific identification method of inventory costing? a. It allows manipulation of profits b. It does not match expenses against revenues c. It is too expensive to use in complex manufacuring situations d. It is only practical where units are costly and easily distinguishable

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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.

Question

Which one of the following is not a disadvantage of the specific identification method of inventory costing?

a. It allows manipulation of profits

b. It does not match expenses against revenues

c. It is too expensive to use in complex manufacuring situations

d. It is only practical where units are costly and easily distinguishable

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What factors might impact on the management’s selection of an inventory cost flow assumption? In your answer you need to provide explanation on what factors could impact on a manager to choose FIFO, LIFO or the average cost method. In your answer you may want to refer to issues such as the impact of various cost flow assumptions on the income statement or the statement of financial position. List four factors in your answer
Which of the following best defines " stockout costs"? A) They are physical goods used in operations. B) They are costs associated with retrieving inventory items from a workshop C) They are costs associated with interruptions to assembly lines D) They are associated with inventory being unavailable when needed to meet demand. E) None of the above.
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