One Disadvantage of Average-Cost Pricing Is That

question 107

Multiple Choice

One disadvantage of average-cost pricing is that

• A)average-cost pricing does not consider historical values.
• B)average-cost pricing is a highly complicated method.
• C)the average cost is rarely useful information in making pricing decisions.
• D)it is easy to lose money with average-cost pricing.
• E)average-cost pricing does not help understand how costs operate at different levels of output.

---

Definitions:

Infectious Diseases

Diseases caused by pathogenic microorganisms, such as bacteria, viruses, parasites or fungi; these diseases can be spread, directly or indirectly, from one person to another.

GAAS Auditing

Standards that guide the conduct of audits on the financial statements of companies, known as Generally Accepted Auditing Standards.

Adverse Opinion

An auditor’s opinion that states that deviations from generally accepted accounting principles are so serious that an unqualified opinion is impossible and a qualified opinion is not justified.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.