The Assignment of Costs to Cost of Goods Sold and Inventory

question 133

True/False

The assignment of costs to cost of goods sold and inventory using (moving) weighted average usually gives different results depending on whether a perpetual or periodic system is used.

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Definitions:

Capital

Resources such as machinery, buildings, and equipment used in the production of goods and services.

Dormitories

Residential facilities provided by educational institutions for students to live in.

Implicit Costs

The opportunity costs that arise from using resources that could have been employed in an alternative use but were instead utilized in the current operation without direct payment.

Explicit Costs

Direct, out-of-pocket payments for goods and services used in the production of a product or provision of a service.