When Using the Moving-Average Cost Formula with a Perpetual System

question 42

Multiple Choice

When using the moving-average cost formula with a perpetual system,

• A) a weighted-average cost is calculated at year end.
• B) a new unit cost is calculated each time a sale is made.
• C) a new unit cost is calculated each time a purchase is made.
• D) a new unit cost is calculated both when a sale is made and when a purchase is made.

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Definitions:

Alkylbenzenesulfonate Detergent

A type of synthetic detergent made from alkylbenzene sulfonic acid, commonly used for its cleaning properties.

Common Soap

A detergent made from fats and an alkali, used for cleaning through its ability to remove dirt and grease.

Fatty Acids

Long chain carboxylic acids, often found in fats and oils, serving as important sources of energy for the body and as components of cell membranes.

Melting Point

The temperature at which a solid becomes a liquid at atmospheric pressure.