In the A-B-C Classification of Inventory,C Items Typically Range from 50

question 60

True/False

In the A-B-C classification of inventory,C items typically range from 50 to 60 percent of the number of items,but only 5 to 10 percent of the annual dollar value (ADV).

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Definitions:

Variable Overhead

Costs that vary with production volume, such as indirect materials and supplies, which are not directly traceable to a single product unit.

Fixed Overhead

Expenses that remain constant regardless of production or sales volume, including rent, salaries, and insurance premiums.

Direct Labour

The workforce directly involved in the manufacturing or production process.

Net Operating Income

Net operating income is the total profit of a business after subtracting operating expenses but before deducting taxes and interest charges.