It Important That the Proper Amount Be Assigned to Inventory

question 52

True/False

It important that the proper amount be assigned to inventory because the amount assigned to inventory will affect the amount eventually recorded as net sales.

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Definitions:

Profits

The financial gain realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Total Profit

Total profit is the financial gain a business achieves after subtracting total costs from total revenue.

AVC

Average Variable Cost, which is the cost a company incurs to produce each additional unit of product, excluding fixed costs.

ATC

Average Total Cost, which is the total cost of production divided by the quantity of output produced.