When a Firm Acquires the Resources Needed to Perform an Activity

question 59

Multiple Choice

When a firm acquires the resources needed to perform an activity, it is obtaining

• A) practical capacity.
• B) resource usage.
• C) activity capacity.
• D) unused capacity.

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Definitions:

Specific Identification

A method in inventory accounting that tracks the actual cost of specific items sold and in inventory.

Net Income Manipulation

The practice of altering financial statements to present a more favorable picture of a company's profits.

Average Cost Formula

A method used to calculate the cost of goods sold and ending inventory by taking the total cost of goods available for sale and dividing it by the total number of units available for sale.

Cost of Goods Sold

The cost of goods sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including material and labor costs.