What are three cost method choices available in Cost Accounting?

The correct answer highlights three specific cost methods used in Cost Accounting: Standard cost, Perpetual average cost, and Actual cost (FIFO or First In First Out).

Standard cost is a method that assigns expected costs to products or services, facilitating budgeting and variance analysis by comparing actual costs to standard costs. This method is useful for operational efficiency, as it helps managers understand where variances are occurring and where adjustments may be needed to control costs.

Perpetual average cost is another method where the average cost of inventory is continuously updated as new purchases are made. This method provides a more dynamic reflection of inventory costs, helping businesses manage their inventory accounting efficiently and maintaining a real-time perspective of cost.

Actual cost, particularly as applied in FIFO (First In First Out), records the costs of items based on the actual costs incurred to produce or purchase them. FIFO ensures that the oldest costs are associated with the first items sold, providing a logical and systematic approach for inventory management that can be essential for profitability analysis and tax reporting.

These methods are fundamental in understanding how organizations manage production costs, inventory valuation, and profitability, which are critical components of effective cost accounting practices. Other potential options do not encompass the same depth or applicability of cost management methodologies, making this