Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Which of the following formulas is used to calculate the variable cost per unit in a manufacturing company?

Variable Cost per Unit = Total Variable Costs / Number of Units Produced

Variable Cost per Unit = Total Sales Revenue / Number of Units Produced

Variable Cost per Unit = (Total Fixed Costs + Total Variable Costs) / Number of Units Sold

Variable Cost per Unit = Total Cost of Goods Sold / Number of Units Purchased

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Verified step by step guidance

Understand the concept of variable costs: Variable costs are costs that change in proportion to the level of production or activity. Examples include direct materials and direct labor costs.

Identify the correct formula for calculating the variable cost per unit: The formula is Variable Cost per Unit = Total Variable Costs / Number of Units Produced.

Analyze why this formula is correct: Total Variable Costs represent the total costs that vary with production, and dividing this by the Number of Units Produced gives the cost per unit.

Compare the other options: Option 2 (Total Sales Revenue / Number of Units Produced) is incorrect because sales revenue is not a cost. Option 3 ((Total Fixed Costs + Total Variable Costs) / Number of Units Sold) is incorrect because fixed costs are not part of variable costs. Option 4 (Total Cost of Goods Sold / Number of Units Purchased) is incorrect because it includes fixed costs and does not focus solely on variable costs.

Conclude that the correct formula is Variable Cost per Unit = Total Variable Costs / Number of Units Produced, as it accurately reflects the relationship between variable costs and production output.