If Consumption Is $10,000 When Income Is $10,000, and Consumption

question 270

Multiple Choice

If consumption is $10,000 when income is $10,000, and consumption increases to $11,000 when income increases to $12,000, the MPS is

• A) 0.10.
• B) 0.25.
• C) 0.50.
• D) 0.90.

---

Definitions:

Weighted-Average Method

A cost accounting method that calculates the cost of equivalent units of production by considering the weight of the cost of current and prior periods' goods.

Equivalent Units

A concept used in cost accounting to express the amount of work done by manufacturers in terms of fully completed units.

Materials

Items or supplies used in the production of goods, considered part of the direct costs in manufacturing.

FIFO Method

"First In, First Out," an inventory valuation method that assumes goods are sold in the order they are acquired, impacting the cost of goods sold and inventory value.