All of the Following Are Deducted from the Purchase Price

question 80

Multiple Choice

All of the following are deducted from the purchase price of inventory in determining cost of goods sold except:

• A) purchase returns
• B) purchase allowances
• C) freight in
• D) purchase discounts

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Definitions:

Industry Supply Curve

A graphical representation showing the relationship between the price of a good and the total output of the industry for that good.

Elastic

Describes a situation where the quantity demanded or supplied changes significantly in response to a change in price.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost of producing one unit of a good or service.

Short Run

A period during which at least one factor of production is fixed, affecting the production capacity.