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All production costs have been steadily rising in the Donner Company for several

ID: 2428178 • Letter: A

Question

All production costs have been steadily rising in the Donner Company for several periods. The company maintains large work in process inventories. Donner Company's cost per equivalent unit computed using the FIFO method would be

the same as that computed under the weighted-average method.

higher than that computed under the weighted-average method.

lower than that computed under the weighted-average method.

could be lower than, the same as, or higher than that computed under the weighted-average method.

Explanation / Answer

could be lower than, the same as, or higher than that computed under the weighted-average method. ABove is correct as no concrete info is mentioned abt teh qty of WIP inventory held at any point of time.