Multiple Choice
The average manufacturing overhead cost per unit usually varies from one period to the next because:
68
views
4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In the context of inventory costing, a batch-level activity will vary with the:
A
number of purchase orders issued
B
number of products sold
C
total number of units produced
D
number of batches processed
Verified step by step guidance1
Understand the concept of batch-level activities: These are activities that are performed each time a batch of goods is handled or processed, regardless of the number of units in the batch.
Identify the key driver for batch-level activities: The cost of these activities is driven by the number of batches processed, not by the number of units, products, or purchase orders.
Analyze the options provided: (1) 'Number of purchase orders issued' relates to procurement activities, not batch-level activities. (2) 'Number of products sold' relates to sales activities, not production or batch-level activities. (3) 'Total number of units produced' relates to unit-level activities, not batch-level activities.
Focus on the correct option: 'Number of batches processed' is the correct driver for batch-level activities because these costs are incurred each time a batch is processed, regardless of the size of the batch.
Conclude that the correct answer is based on the definition and nature of batch-level activities, which vary with the number of batches processed.
3:41mWatch next
Master Cost of Goods Sold:Perpetual Inventory with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory practice set
Problem sets built by lead tutorsExpert video explanations