Which sentence is true?* In managerial accounting, products costs are needed to value inventory on the balance sheet and to compute cost-of-goods-sold expense on the income statement, Under generally accepted accounting principles, inventory is valued at its cost until it is sold. Then the cost of the inventory becomes an expense of the period in which it is sold In managerial accounting, products costs are needed to help managers with planning and to provide them with data for decision making. Decisions about product prices, the mix of products to be produced, and the quantity of output to be manufactured are among those for which product cost information is needed. In managerial accounting, it is hard to imagine how management can control or reduce production costs if management does not have a clear idea of how much it costs to make its product. Thus, product costs provide crucial data for a variety of cost management purposes. Exercise Given these data, the Candidate determines, using both the FIFO and the Weighted- Average Cost Methods, the cost of goods sold and the ending inventory: Units available 850 Units sold Actual unit cost 1,30 Total cost 1105 670 620 1,50 930 Beginning inventory Sale Purchase Sale Purchase Total 550 245 1,45 355 1715 1220 2390 a) FIFO = b) Weighted-Average Cost = Your