Following is partial information for the income statement of Audio Solutions Company under three different inventory costing met
hods, assuming the use of a periodic inventory system: Required: 1. Compute cost of goods sold under the FIFO, LIFO, and average cost inventory costing methods. 2. Prepare an income statement through pretax income for each method. Sales, 327 units; unit sales price, $51; Expenses, $1,540 3. Rank the three methods in order of income taxes paid (favorable cash flow
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<h2>Hello!</h2>
The answer is: d. total costs
<h2>Why?</h2>The total costs are the sum of all the costs needed to produce a good or a service. It includes both fixed and variable production costs to show us the measure of a total cost.
We can calculate the total costs using the following formula:
Fixed costs are all the constant costs. Fixed costs can be the salary of its workers (since they are based in hours worked), structure and good/actives insurance, taxes among others.
Variable costs are all the costs that can change thru the time, depending on the production volume. For example, if the production increases, the variable costs will increase too, also, if the production decreases, the variable costs will decrease too.
Have a nice day!