Exhibit 19-7

question 58

Multiple Choice

Exhibit 19-7.The following table shows the value of CPI for three years in a country. Refer to Exhibit 19-7.Compute the annual inflation rate for 2004.

• A)4%
• B)1.46%
• C)3.36%
• D)4.87%

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Definitions:

Standards

Criteria or benchmarks used for measuring performance or quality in various fields, including manufacturing, auditing, and accounting.

Actual Information

Factual data or evidence that is true and accurate, without alteration or distortion.

Raw Materials Quantity Variance

The difference between the actual quantity of raw materials used in production and the estimated quantity expected to be used, measured in terms of cost.

Direct Materials Purchases Variance

This measures the difference between the actual cost of direct materials purchased and the expected (or standard) cost of those materials.