MB-920 Describe Dynamics 365 Supply Chain Management Practice Question
A company needs to track the cost of raw materials from the moment they are received until the finished goods are sold. Which costing method should they use to ensure that each unit's cost is individually tracked?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Specific identification
Specific identification tracks each unit individually. FIFO assumes first-in-first-out. Weighted average uses average cost. Standard cost uses predetermined cost.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
FIFO (first in, first out)
Why it's wrong here
FIFO assumes oldest stock sold first, not individual tracking.
- ✗
Standard cost
Why it's wrong here
Standard cost uses predetermined cost, not actual.
- ✓
Specific identification
Why this is correct
Specific identification tracks each unit's cost individually.
- ✗
Weighted average
Why it's wrong here
Weighted average smooths cost fluctuations, no individual tracking.
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