Select the Appropriate Cost Behavior for the Following Costs Incurred

question 24

Multiple Choice

Select the appropriate cost behavior for the following costs incurred by an automobile manufacturer.
-cost of assembly line workers

• A)variable
• B)fixed

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Definitions:

Inventory Formula

The equation used to calculate the value of a company's inventory, commonly stated as Beginning Inventory + Purchases - Cost of Goods Sold = Ending Inventory.

Physical Flow

The actual movement of goods or materials through a manufacturing process, from receipt of raw materials to delivery of finished products.

Weighted Average Method

An inventory valuation method that applies a weighted average cost to the goods available for sale, to calculate cost of goods sold and ending inventory.

Responsibility Centre

A management accounting tool in which parts of an organization are allocated responsibility for controlling costs, revenues, or investments.