MB-920 Describe Dynamics 365 Supply Chain Management Practice Question
A company uses Dynamics 365 Supply Chain Management and needs to track the cost of goods sold (COGS) using a method that assumes the most recently produced items are sold first. Which inventory costing method should they use?
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
✓
LIFO (Last In, First Out)
LIFO (Last In, First Out) assumes the last items produced are sold first. Option B is correct. Option A (Standard cost) uses predetermined costs. Option C (Weighted average) uses an average cost. Option D (FIFO) assumes first items produced are sold first.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Standard cost
Why it's wrong here
Uses predetermined costs.
- ✓
LIFO (Last In, First Out)
Why this is correct
Assumes newest items sold first.
- ✗
Weighted average
Why it's wrong here
Uses average cost.
- ✗
FIFO (First In, First Out)
Why it's wrong here
Assumes oldest items sold first.
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