When Using the Weighted-Average Cost Method to Determine the Cost

question 1

True/False

When using the weighted-average cost method to determine the cost of inventory sold, the weighted-average cost per unit is calculated as the cost of goods available for sale divided by the number of units available for sale.

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Definitions:

Direct Labour

The wages paid to workers directly involved in producing goods or providing services.

Indirect Labour

Labor costs associated with tasks that do not directly contribute to the production of goods or services but are necessary for the operation.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including utilities, rent, and salaries of employees not directly involved in production.

Period Costs

Expenses that are not directly tied to production activities and are expensed in the period they are incurred, such as selling, general, and administrative expenses.