The Standard-Costing Method

question 54

Multiple Choice

The standard-costing method

• A)adds a layer of complexity to the calculation of equivalent-unit costs in a process-costing environment.
• B)makes calculating equivalent-unit costs unnecessary.
• C)requires an analysis of the spoilage costs in beginning inventory.
• D)requires an analysis of the spoilage costs in ending inventory.
• E)requires a calculation of the cost allocation rate.

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Definitions:

Outstanding Voting Shares

The total number of shares of a corporation's stock that are currently owned by shareholders and have the right to vote.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, neither under compulsion to act.

Equity Method

An accounting technique used by a company to record investments in other companies, where the investment is initially recorded at cost and adjusted thereafter for the post-acquisition change in the investor’s proportion of net assets in the investee.

Investor Corporation

Typically refers to a company whose primary business is holding, investing in, and managing securities for investment purposes.