Q389
In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through
A.
price index
AnswerB.
cost index
C.
profit index
D.
cost driver index
Answer: Option A
Solution
Answer: Option A
Solution:
In cause and effect relationship between cost level and cost driver, inflationary price effects are removed by dividing cost through price index. A price index is a normalized average (typically a weighted average) of price relatives for a given class of goods or services in a given region, during a given interval of time.