Using the Following Cost Information Regarding Finished Goods, What Would

question 70

Multiple Choice

Using the following cost information regarding finished goods, what would be the ending value of the finished goods inventory if the market value of the goods is $200,000? $$\begin{array} { | l | r | } \hline & { \text { Cost } } \\\hline \text { Materials } & \$ 150,000 \\\hline \text { Costs to process into finished product } & 100,000 \\\hline\end{array}$$

• A)$0
• B)$150,000
• C)$200,000
• D)$250,000

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Definitions:

Economic Profits

The surplus obtained when a firm’s total revenues exceed both its explicit and implicit costs, providing a full picture of its financial health.

Short Run

A period in economics during which some factors of production are fixed, limiting the ability of a business to adjust to market changes.

Perfect Competitor

A market participant in perfect competition, characterized by a homogeneous product and no single buyer or seller having market control.

Short Run

A period during which at least one input, such as plant size or capital, is fixed and cannot be changed, affecting a firm's production capabilities.