A Highly Successful Bakery Specializes in Making Cherry Tarts

question 76

Multiple Choice

A highly successful bakery specializes in making cherry tarts.The bakery workers are paid by the number of tarts they make and that are sold.Which of the following costs at the bakery is NOT variable?

• A) cherries
• B) rental fee on bakery's building
• C) flour for tarts
• D) all of these

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Definitions:

Beginning Inventory

The value of all inventory that a company has in stock at the start of an accounting period.

Ending Inventory

The final value of goods available for sale at the end of an accounting period, calculated before the new accounting period begins.

Periodic Inventory System

An inventory accounting system where updates to inventory levels are made periodically at the end of accounting periods, rather than after each sale or purchase.

Average Cost Method

An inventory costing method that assigns the average cost of all similar items in inventory to the cost of goods sold and to ending inventory.