An Auditor Concluded That No Excessive Costs for Idle Plant

question 15

Multiple Choice

An auditor concluded that no excessive costs for idle plant were charged to inventory in a client's standard costing system. This conclusion most likely related to the auditor's objective to obtain evidence about the account balance
Assertion for inventory of:

• A) valuation and allocation.
• B) completeness.
• C) existence.
• D) rights and obligations.

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Definitions:

Price Elasticity

The measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating its sensitivity to price changes.

Midpoint Method

A technique used to calculate the price elasticity of demand or supply, avoiding the problem of using different base values for percentage calculations.

Supply

The total amount of a product or service available for purchase at any given price point.

Price Elasticity

A gauge of the degree to which the amount of a good sought or offered adjusts when there's a change in its price.