Why are incidental costs igored in inventory costing

Assignment Help Accounting Basics

Reference no: EM131533233

Question: 1. Use LCM applied separately to the following individual items to compute ending inventory

Product Units Unit Recorded Cost Unit Market Cost

A . . . . . . . . . . . 20 $ 6 $ 5

B . . . . . . . . . . . 40 9 8

C . . . . . . . . . . 10 12 15

2. Why are incidental costs sometimes ignored in inventory costing? Under what accounting constraint is this permitted?

3. If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of goods sold? Why?

Reference no: EM131533233

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