Question

7. The inventory valuation technique in which the inventory purchased later will be used first is...

7. The inventory valuation technique in which the inventory purchased later will be used first is called……………………

c. LIFO

a. Specific Cost

b. FIFO

d. Average Cost

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8. Administrative expenses belong to the category……………………………………………………………………

b. Period cost

a. Product cost

c. None of the above

Business   Accounting   
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Answer #1

7.

The inventory valuation technique in which the inventory purchased later will be used first is called LIFO.

Under LIFO (last in first out) method, inventory purchased at the latest, is charged to cost first. Thus, ending inventory under LIFO method consists of the units purchased earlier.

Correct option is c.

8.

Administrative expenses belong to the category Period cost.

Selling and administrative expenses are known as period costs. Direct materials, direct labor and manufacturing overhead are known as product costs.

Correct option is b.

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