Apparent Corp. has developed the following information on product costs and inventories for a three-month period: Manufacturing costs $4,000 $6,000 $5,500
Based on managerial judgment, the best predictor of manufacturing costs is
A) beginning inventory.
B) units manufactured.
C) ending inventory.
D) units available.

Question

Apparent Corp. has developed the following information on product costs and inventories for a three-month period:  Manufacturing costs $4,000 $6,000 $5,500
Based on managerial judgment, the best predictor of manufacturing costs is
A) beginning inventory. 
B) units manufactured. 
C) ending inventory. 
D) units available.

Quizplus · Accepted Answer

The best predictor of manufacturing costs is the number of units manufactured, as this directly relates to the amount of resources (such as labor and materials) used in producing the product. Beginning inventory, ending inventory, and units available do not provide as direct a relationship to manufacturing costs.