When Using the Weighted-Average Cost Method to Determine the Cost

question 33

Multiple Choice

When using the weighted-average cost method to determine the cost of inventory sold,the weighted-average cost per unit is calculated as the:

• A) cost of goods available for sale divided by the number of units available for sale
• B) cost of goods sold divided by the average number of units in inventory
• C) cost of goods sold divided by the number of units sold
• D) cost of goods in ending inventory divided by the number of units in ending inventory

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Definitions:

Prior Service Credit

A pension plan feature that grants employees credit for service periods before the commencement of the pension plan, affecting their benefits.

Defined Benefit Pension Plan

A retirement plan where the benefits that an employee will receive upon retirement are defined based on a formula considering factors such as salary history and duration of employment.

Service Cost

The portion of the pension expense that is recognized for the increase in pension benefits related to employee services of the current period.