Goods That Go into Inventory and Are Not Sold During

question 44

Multiple Choice

Goods that go into inventory and are not sold during the current period are

• A)counted as intermediate goods and so are not included in current period GDP.
• B)counted in current GDP only if the firm that produced them sells them to another firm.
• C)included in current period GDP as inventory investment.
• D)included in current period GDP as consumption.

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Definitions:

Blending Department

A division in a manufacturing or processing plant where ingredients are combined to produce a final product.

Weighted-Average Method

This method calculates inventory and cost of goods sold values by averaging the costs of all goods available for sale, weighting them according to their quantities.

Labour and Overhead

Combined costs associated with the workforce (labour) and indirect expenses (overhead) necessary for production but not directly tied to specific units of product.

Process Costing System

An accounting method used where production is continuous, assigning costs to units of product based on the processes they undergo.