When Preparing a Price Index Based on Multiple Products, If

question 127

Multiple Choice

When preparing a price index based on multiple products, if the price of each product is weighted by the quantity of the product purchased in a given period of time, the resulting index is called a ________ price index.

• A) Paasche
• B) weighted aggregate
• C) Laspeyres
• D) cyclical (seasonal)

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Definitions:

Cost of Work

This could refer to the total expenses associated with performing a particular job or task, including labor, materials, and overhead costs.

Overapplied Overhead

A scenario in which the overhead costs assigned surpass the real overhead expenses incurred.

Allocation

The process of assigning costs or resources to various departments, products, or activities based on specific criteria.

Schedule of Cost

A detailed list or report showing the various costs associated with a project or production, including direct and indirect costs.