You Know That the Consumer Price Index (CPI)at the Beginning

question 95

Multiple Choice

You know that the consumer price index (CPI) at the beginning of this year was 250 and the rate of inflation was 14%; this would mean the:

• A) price of cat food increased by exactly 14%.
• B) CPI at the beginning of last year was 215.
• C) price of dog food probably fell.
• D) CPI at the end of the year was 285.
• E) rate of inflation next year will be more than 14%.

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Definitions:

Cost of Goods Sold

The direct financial outlays for making the goods a company offers for sale, including the cost of materials and labor.

Supplies Account

An account used to track the costs of supplies that have not been consumed by the end of an accounting period.

Operating Expenses

Costs associated with the day-to-day operations of a business, such as rent, utilities, and payroll.

Operating Income

The profitability from a company's core business operations, excluding deductions of interest and taxes.