When Does Payback Occur

question 27

Multiple Choice

 When does payback occur?

• A) When the net cumulative benefits minus costs equal one
• B) When the net cumulative benefits equal the net cumulative costs
• C) When the net costs are lower than the cumulative benefits
• D) When the cumulative benefits are double the cumulative costs

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Definitions:

FIFO Method

"First In, First Out" method of inventory valuation where the oldest inventory items are recorded as sold first.

Job Order Cost Accounting

A costing method that gathers costs of materials, labor, and overhead for individual jobs or batches.

Process Costing Systems

Process costing systems are accounting methods used to allocate production costs to units of output, particularly effective in industries that produce identical or similar products in continuous processes.