Table 21-4. -Refer to Table 21-4.If the Bank Faces a Reserve Requirement

question 21

Multiple Choice

Table 21-4.

-Refer to Table 21-4.If the bank faces a reserve requirement of 10 percent,then the bank

• A) is in a position to make a new loan of $10,000.
• B) has fewer reserves than are required.
• C) has excess reserves of $12,500.
• D) None of the above is correct.

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Definitions:

Weighted-Average Method

An inventory costing method that assigns a cost to inventory on the basis of the average cost of all similar goods available during the period.

Conversion Costs

The combined costs of direct labor and manufacturing overhead involved in transforming raw materials into finished goods.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases less cost of goods sold.

Conversion Costs

are the costs required to convert raw materials into finished goods, comprising direct labor and manufacturing overhead.