The Appropriate Cost Accounting System to Use When Inventory Items

question 55

Multiple Choice

The appropriate cost accounting system to use when inventory items are produced on an assembly line is

• A) job-order costing.
• B) process costing.
• C) weighted average.
• D) perpetual method.

---

Definitions:

Cost of Capital

The target earnings rate that a company seeks on investments to preserve its value in the market and gather funds.

Mutually Exclusive

Decisions or projects that, if chosen, prevent the selection of one or more other options.

Present Value

The present value of a future amount of money or series of cash flows, adjusted for a certain return rate.

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment, using cash flow estimates without considering the time value of money.