If in a Certain Year the Indices of Prices Received

question 186

Multiple Choice

If in a certain year the indices of prices received and paid by farmers were 115 and 142 respectively, the parity ratio (in percentage terms) would be

• A) 123.
• B) 81.
• C) 69.
• D) 27.

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Definitions:

Weighted-Average Method

An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold, weighing the average by the quantities purchased at different prices.

Conversion Cost

The combination of direct labor and manufacturing overhead costs required to convert raw materials into finished products.

Molding Department

A specific section within a manufacturing facility where the process of shaping materials into desired forms through various molding techniques occurs.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on a weighted average of the costs.