Which of the Following Criteria Does NOT Have to Be

question 147

Multiple Choice

Which of the following criteria does NOT have to be met in order to be able to value inventory above cost?

• A) The cost of disposal can be estimated.
• B) The sale is assured.
• C) There is an active market for the product.
• D) The sale must already have occurred.

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Definitions:

Break-Even

The point at which total costs and total revenues are equal, resulting in neither profit nor loss.

Margin of Safety

Margin of safety represents the difference between actual or projected sales and the break-even sales levels, measuring the buffer a company has before it incurs a loss.

Break-Even

The point at which total costs and total revenues are equal, resulting in no net loss or gain.

Variable Costs

Costs that change in proportion to the level of goods or services produced by a business.