Which of the Following Statements Is True Regarding Cost Per

question 49

Multiple Choice

Which of the following statements is true regarding cost per equivalent unit?

• A)This calculation only includes variable costs.
• B)This measure is used to assign costs to units transferred out.
• C)This measure always stays the same from one month to the next regardless of different levels of production.
• D)The formula to calculate this measure uses total equivalent units accounted for divided by total costs to be accounted for.
• E)None of the answer choices is correct.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is retained by the company to reinvest in its core business or to pay debt.

Reported Net Income

The total profit or loss of a company after all expenses and taxes have been subtracted from total revenue, as shown on the income statement.

Direct Method

An approach to preparing the cash flow statement where actual cash inflows and outflows from operational activities are listed.

Net Cash Flow

It is the difference between a company's cash inflows and outflows within a specified period, indicating the company's liquidity position.