If the Cost of Materials Increased from January to February

question 21

Multiple Choice

If the cost of materials increased from January to February and there is beginning inventory for each month, which of the following statements would be true? (Assume all other factors are held constant.)

• A)Only the weighted average method would result in an increase in the unit cost for February.
• B)Only the FIFO method would result in an increase in the unit cost for February.
• C)Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the weighted average method would result in a greater unit cost for units in February than the FIFO method.
• D)Both the weighted average method and the FIFO method would result in an increase in the unit cost for February; however, the FIFO method would result in a greater unit cost for units in February than the weighted average method.

Analyze the impact of taxes on market activities and calculate the deadweight loss resulting from taxation.

Describe the concept of deadweight loss and its causes.

Examine the future projections of taxes and government spending as a percentage of GDP in the U.S.

Evaluate the advantages and disadvantages of different tax systems including lump-sum tax.

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Definitions:

Investments

Assets purchased with the expectation that their value will grow or generate income.

Quarterly

Taking place four times a year, or every quarter.

Withdrawals

The act of taking money out of an account, fund, or similar financial vehicle.

Invest

To allocate money in the expectation of some benefit in the future, usually through the purchase of assets with the hope that they will increase in value.