When There Is an Excess Quantity of a Product Supplied

question 259

Multiple Choice

When there is an excess quantity of a product supplied, there will be

• A) a tendency for price of the product to increase.
• B) a tendency for price of the product to fall.
• C) incentives for consumers to leave the market.
• D) upward pressure on the price of labor.

---

Definitions:

Inventory Costing

Methods used to value and account for inventory, including Specific Identification, FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and Weighted Average.

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the costs incurred to convert raw materials into finished products.

First-In, First-Out

A rephrased definition: An accounting method used to value inventory and calculate cost of goods sold, assuming the earliest goods purchased are the first to be sold.

Conversion Costs

Conversion costs are the costs required to convert raw materials into finished products, including labor and overhead.