Discover the ideal inventory costing method for manufacturing environments with consistent costs and lot sizes in Microsoft Dynamics 365 Supply Chain Management. Learn why standard cost is the preferred choice for accurate financial tracking and decision-making.
Table of Contents
Question
You are responsible for selecting an inventory costing method that assigns costs to raw materials and components used in manufacturing and sold to customers.
You are overseeing a product with little fluctuation in cost and a consistent manufactured lot size.
You are tasked with ensuring the chosen method accurately reflects the cost of items throughout the manufacturing and sales process.
What inventory costing method should you choose?
A. FIFO
B. LIFO
C. Standard cost
D. Moving average
Answer
C. Standard cost
Explanation
The Standard cost method assigns a cost to raw materials and components that are used in manufacturing and sold to customers. It is often used in manufacturing or raw materials/components with little price variability. FIFO, LIFO, and Moving average are other inventory costing methods but they do not meet the requirements of the scenario.
Microsoft Dynamics 365 Supply Chain Management Functional Consultant MB-330 certification exam assessment practice question and answer (Q&A) dump including multiple choice questions (MCQ) and objective type questions, with detail explanation and reference available free, helpful to pass the Microsoft Dynamics 365 Supply Chain Management Functional Consultant MB-330 exam and earn Microsoft Dynamics 365 Supply Chain Management Functional Consultant MB-330 certification.