The Consumer Price Index for Planet Econ Consists of Only

question 26

Multiple Choice

The consumer price index for Planet Econ consists of only two items: books and hamburgers.In 2011,the base year,the typical consumer purchased 10 books for $25 each and 25 hamburgers for $2 each.In 2012,the typical consumer purchased 15 books for $30 each and 30 hamburgers for $3 each.The consumer price index for 2012 on Planet Econ equals

• A) 100.
• B) 108.
• C) 115.
• D) 125.
• E) 180.

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Definitions:

Weighted-Average Method

An inventory costing method that determines the cost of goods sold and ending inventory based on the average cost of all units available for sale during the period.

Total Cost Accounted

The aggregate cost that has been recorded or reported for a certain product, project, or activity, including direct and indirect costs.

Conversion Costs

The costs necessary to convert raw materials into finished goods, including labor and overhead expenses.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory value based on the average cost of all goods available for sale during the period.