Table 10-4
the Country of Caspir Produces Only Cereal and Milk

question 278

Multiple Choice

Table 10-4
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.Prices and Quantities
$$\begin{array} { c c c c c } \text { Year } & \text { Price af Cereal } & \begin{array} { c } \text { Quantity af } \\\text { Cereal }\end{array} & \text { Price af Millz } & \begin{array} { c } \text { Quantity df } \\\text { Mill }\end{array} \\\hline 2008 & \$ 4.00 & 90 & \$ 1.50 & 150 \\2009 & \$ 4.00 & 100 & \$ 2.00 & 180 \\2010 & \$ 5.00 & 120 & \$ 2.50 & 200 \\2011 & \$ 6.00 & 150 & \$ 3.50 & 200\end{array}$$
-Refer to Table 10-4. This country's inflation rate from 2010 to 2011 was

• A)15.4%.
• B)26.1%.
• C)45.5%.
• D)77.8%.

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Definitions:

Materials Costs

The cost of raw materials and supplies used in the production of goods or in the provision of services.

Goods Transferred

Goods transferred refers to the movement of inventory from one location to another, or the process of turning over goods from a seller to a buyer.

Conversion Costs

The combined cost of direct labor and manufacturing overhead, reflecting the expenses to convert raw materials into finished products.

Equivalent Units

A concept used in process costing that converts partially completed goods into a number of fully completed units for accounting purposes.