In comparing WA and FIFO methods, which of the following is not true?
a)If manager's compensation is based on operating income, the manager may prefer WA method, which increase operating income even though it results in higher tax payments.
b) In a period of rising prices, the weighted-average method will decrease taxes because cost of goods sold will be higher and operating income lower.
c) In a period of falling prices, the higher the cost of goods sold under FIFO will lead to lower operating income and lower tax payments, saving the company cash and increasing the company's value.
d) WA provides managers with information about changes in the costs per unit from one period to the next.

Answer rating: 100% (QA)

Letter D is not true WA does not provide managers wi... View the full answer