A Bill of Material Does Not Include

question 117

Multiple Choice

A bill of material does not include

• A)quantity of component inputs.
• B)price of component inputs.
• C)quality of component inputs.
• D)type of product output.

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Definitions:

Average Cost

A calculation of the total cost of goods available for sale divided by the total units available for sale, used to compute cost of goods sold in certain inventory valuation methods.

Cost Of Goods Sold

The direct costs attributable to the production of the goods sold in a company.

Periodic Inventory System

An inventory system in which the inventory count and cost of goods sold calculation are performed at specific intervals, typically at the end of an accounting period.

FIFO

FIFO, which stands for "first in, first out," is an inventory valuation method where the first items placed in inventory are the first ones sold. This approach aims to mirror the actual flow of goods.