An Advantage of the Weighted Average Cost Method of Accounting

question 14

True/False

An advantage of the weighted average cost method of accounting for inventory is that it values the statement of financial position inventory at current replacement costs.

---

Definitions:

Last Year's Margin

Represents the difference between the sales revenue and the cost of goods sold from the previous year, often expressed as a percentage of sales.

Combined ROI

A metric that aggregates the return on investment from multiple projects or business units into a single figure.

Investment Opportunity

A situation where funds can be placed in a venture with the expectation of earning a return on the investment.

Return on Investment (ROI)

Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment, calculated by dividing the profit of an investment by its cost.