Question

An assumption about cost flow is necessary:

Answer 1

Answer:

d. because prices usually change, and tracking which units have been sold is difficult

Explanation:

Cost flow assumptions is necessary because there is constant change of cost which is the experience of companies, also due to inflation. If there is a stable cost, cost flow would be inconsequential

Answer 2

Answer:

The correct answer is letter "D": because prices usually change, and tracking which units have been sold is difficult.

Explanation:

Costs flow assumptions are the result of many factors. Inflation, changes in costs as a result of changing prices, and inventory sales tracking per unit are the most important. Cost flow assumptions analyze how costs are removed from a firm's inventory and reported in the account of Cost of Goods Sold using costing methods such as the FIFO (First-in, First-out), LIFO (Last-in, First-Out), and the Weighted Average.