Which Method Requires the Unit Cost Is Calculated by Dividing

question 33

Multiple Choice

Which method requires the unit cost is calculated by dividing the total cost of goods available for sale by the total number of units available for sale?

• A)FIFO
• B)LIFO
• C)Weighted average method
• D)Specific identification

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Definitions:

Overhead Cost

Indirect costs of business operations, such as lighting, rent, and administrative salaries, not directly tied to a specific product or service.

Activity Rates

Used in activity-based costing, these rates are applied to specific activities to allocate costs accurately to products or services based on their consumption of those activities.

Traditional Costing Method

A costing methodology that allocates factory overhead to products based on the volume of production resources they consume.

Activity-Based Costing

Activity-based costing is an accounting method that assigns costs to products or services based on the activities and resources that go into producing them.