The Difference in Cost Per Equivalent Units Between the Weighted

question 33

Multiple Choice

The difference in cost per equivalent units between the weighted average method and the FIFO method

• A) will be higher if there is no beginning work in process.
• B) will be higher if there is no ending work in process.
• C) will disappear if there is no beginning work in process.
• D) will be lower if there is no ending work in process.

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Definitions:

Average Rate Of Return Method

An investment appraisal technique that calculates the expected return of an investment by averaging its annual profits and dividing by its initial cost.

Net Present Value Method

A method used in capital budgeting and investment planning that calculates the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Net Present Value Method

A financial analysis tool used to determine the attractiveness of an investment by calculating the present value of its future cash flows.

Present Values

The present-day worth of a future sum of money or continual cash flows, using a particular rate of return for calculation.