Solved

Scenario 9.1 Chocolatta University, an Institute of Higher Learning That Educates Future

question 12

Multiple Choice

Scenario 9.1
Chocolatta University, an institute of higher learning that educates future confectionary chefs, offers a very attractive benefits package. Costs associated with benefits are about double those of rival institutions, Jellibelli Tech and Truffle State. However, Chocolatta U. administrators feel that the extensive benefits attract the most talented faculty and staff in the world. Due to recent societal trends in fitness and health, Chocolatta U. has experienced a downturn in its funding support from global confectionary corporations seeing lower profits. The university's budget has therefore been reduced. Joy Almond, human resource benefits manager, has been asked to find ways to reduce expenditures on benefits, so that important university programs such as Candy Fillings and White Chocolate Creations do not suffer. Ms. Almond is in a quandary!
-Refer to Scenario 9.1. Chocolatta University administrators justify the high costs of its benefits programs by espousing which particular theory?

Definitions:

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all goods available for sale.

Direct Materials Cost

Direct materials cost refers to the cost of raw materials and components that are directly used in the production of a product, which are easily traceable to the finished product.

Equivalent Units

A concept used in cost accounting to express the amount of work done on in-process products in terms of complete units of output.

FIFO Method

An inventory costing method where the earliest items added to inventory are the first to be recorded as sold, affecting financial statements during inflationary periods.