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Q

You are tasked with managing inventory for products with highly variable costs.

You will select an inventory costing method that prioritizes the most recently received items for outbound processes.

What inventory costing method should you choose?

ID: #25465 Practice Assessment 8 views
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#25465Q ID
ModerateDifficulty
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  • A LIFO ✔ ✖
  • B Standard cost ✔ ✖
  • C FIFO ✔ ✖
  • D Moving average ✔ ✖
Correct Answer

Explanation

The LIFO (last in first out) method uses the inventory received last to satisfy outbound requirements. FIFO uses the inventory received first, Moving average reevaluates the cost whenever a new purchase receipt is posted, and Standard cost assigns a cost to raw materials and components that are used in manufacturing and sold to customers.

Cost accounting - Documentation - Training | Microsoft Learn
Costing versions overview - Documentation - Training | Microsoft Learn
Cost management home page - Documentation - Training | Microsoft Learn

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