Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 6 - Reporting and Analyzing Inventory - Questions: 8

Answer

Allocation of cost of goods available for sale, based on the actual physical flow of the goods, is impractical and inappropriate.

Work Step by Step

Earlier, specific costing( tracking) physical flow of goods was possible, when a company sold a limited variety of high-unit-cost items or single variety of low-unit-cost items.
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