Inventories Are Carried in the Accounting Records at Cost, EXCEPT

question 71

Multiple Choice

Inventories are carried in the accounting records at cost, EXCEPT when

• A) The inventory is damaged
• B) The market value of the inventory falls below its acquisition cost
• C) Either the inventory is damaged or the market value of the inventory falls below its acquisition cost
• D) The market price rises above cost

Practice cash management within a manufacturing context, tracing the impact of manufacturing operations on cash flows.

Understand the concept of standard cost systems, including the recording of transactions at standard costs.

Calculate variances between actual and standard costs for direct materials and direct labor.

Analyze and interpret materials price and quantity variances.

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Definitions:

Labor Costs

The total expenses incurred by companies for the payment of wages, benefits, and taxes associated with the employment of labor.

Capital Costs

Expenditures for acquiring fixed assets such as buildings, machinery, and equipment, or the costs associated with improving existing assets.

Marginal Product

The rise in production resulting from one more unit of input.

Price of Labor

The compensation workers receive for their contribution to the production process, often synonymous with wage rate.