If the Consumer Price Index Changes from 125 in September

question 109

Multiple Choice

If the consumer price index changes from 125 in September to 150 in October,what is the rate of inflation?

• A)45.5%
• B)20.0%
• C)16.7%
• D)9.1%

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Definitions:

Predetermined Overhead Rates

A rate calculated before a period begins, used to estimate the manufacturing overhead costs that will be allocated to each unit of product.

Cost of Goods Sold

The total direct costs attributable to the production of the goods sold by a company, including material and labor costs.

Activity Rate

A measure used in cost accounting to allocate costs to products or services based on the activities required to produce them.

Estimated Cost

An approximation of the cost to produce goods or services, used for budgeting and planning.