The BCG Matrix Is a Means of Evaluating Strategic Business

question 66

True/False

The BCG matrix is a means of evaluating strategic business units on the basis of both their business growth rates and their profitability.

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Definitions:

Weighted-Average Method

An inventory valuation method that calculates the cost of goods sold and ending inventory based on the average cost of all similar items in inventory.

Equivalent Units of Production

A concept in cost accounting used to allocate production costs to units produced, accounting for partially completed units by converting them into an equivalent number of fully completed units.

Conversion Costs

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

Weighted-Average Method

A cost accounting method that assigns an average cost to each unit of inventory by weighting the costs of similar items.