A Manager of a Profit Center Cannot

question 53

Multiple Choice

A manager of a profit center cannot

• A)Incur cost to operate the center.
• B)Set the selling price of the center's product.
• C)Commit funds to invest in assets.
• D)None of these answer choices are correct.

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Definitions:

FIFO

An inventory valuation method where the first items purchased or produced are the first ones sold, standing for "First In, First Out."

Cost of Goods Sold

The immediate expenses related to creating a company's sold products, encompassing the price of materials and the labor specifically involved in manufacturing the item.

Gross Profit Inventory Method

An accounting method to estimate the value of ending inventory and cost of goods sold using the gross profit margin.

Inventory Valuation

The method used to determine the cost associated with an inventory at the end of an accounting period, impacting the cost of goods sold and net income.