Which of the Following Statements Is True

question 131

Multiple Choice

Which of the following statements is true?

• A)Even if we know the values of the consumer price index for the years 2009 and 2010,we cannot calculate the inflation rate for 2010 if we do not know which year is the base year.
• B)If we know the base year is 1990,and if we know the value of the consumer price index for the year 2010,then we have all the information we need to calculate the inflation rate for 2010.
• C)If we know the base year is 2000,and if we know the value of the consumer price index for the year 1995,then we have all the information we need to calculate the inflation rate for 1995.
• D)If we know the base year is 2000,and if we know the value of the consumer price index for the year 1995,then we have all the information we need to calculate the percentage change in the cost of living between 1995 and 2000.

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Definitions:

Income Statement

The income statement is a financial report that shows a company's revenues, expenses, and profits over a specific period, highlighting its financial performance.

Contribution Format

An income statement format that separates fixed and variable costs, highlighting the contribution margin of a company's products or services.

Segmented Statements

Financial reports that break down the revenue, costs, and profitability of different parts of a company, such as departments or product lines.

Variable Costing

Variable costing is a costing method that includes only variable production costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.