CPA organization Environment and also Concepts (BEC) assist » work Management: Performance monitoring » LIFO, FIFO, & Weighted average Inventory methods

Which perform costing technique would a company that wishes to maximize revenues in a period of climbing prices use?


In a period of increasing prices, the earliest inventory, or the inventory provided in FIFO would certainly be the least expensive. Thus, the benefit margin would certainly be the biggest here.

You are watching: Which of the following costing methods will yield the lowest inventory value?

Assuming consistent inventory quantities, i m sorry of the adhering to inventory costing techniques will create a reduced inventory turnover ratio in one inflationary economy?


In a period of climbing prices, the earliest inventory, or the inventory provided in FIFO would certainly be the the very least expensive. Thus, the profit margin would certainly be the largest here.

During durations of inflation, a perpetual inventory system would an outcome in the very same dollar amount of ending inventory as a regular inventory system under which of the complying with inventory valuation methods?


Only under FIFO would certainly the use of a perpetual system result in the exact same dollar amount of finishing inventory as a routine system.


Variable costing commonly produces the lowest inventory values because only variable costs are capitalized.

Which that the following costs is deducted from revenues of a manufacturing firm in stimulate to recognize gross margin, however not deducted from earnings to recognize contribution margin? 


Under the absorb approach, every fixed and variable production overhead is part of price of products sold to determine an entity"s pistol margin.


Using the FIFO method accounts for occupational to it is in finished and also using the weight average technique blends the units.

See more: One Quart Equals How Many Milliliters (Ml) In A Quart? How Many Milliliters (Ml) In A Quart


Clark Atlanta University, Bachelor of Science, Physics. Berry College, medical professional of Education, Curriculum and also Instruction.


Kutztown college of Pennsylvania, Bachelor the Science, Finance. Kutztown university of Pennsylvania, Bachelor of Science, ...
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