If 2008 Is the Base Year and the Price Index

question 95

Multiple Choice

If 2008 is the base year and the price index in 2009 is 109,prices in 2009 are _____ than prices in 2008.

• A)1 percent higher
• B)8 percent higher
• C)9 percent higher
• D)0.9 percent higher
• E)12 percent higher

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Definitions:

Cost Per Equivalent Unit

A calculation used in process costing that divides the total cost by the number of units produced, taking into account partial completion of units at the end or beginning of an accounting period.

Conversion Costs

The combined costs of direct labor and manufacturing overheads that are incurred in turning raw materials into finished products.

Manufacturing Overhead

Indirect factory-related costs that are incurred when producing a product, such as utilities, maintenance, and quality control.

Indirect Materials

Materials used in the production process that cannot be directly linked to a specific product, such as lubricants and cleaning supplies used in a factory.