All EXCEPT Which of the Following Statements About ABC Analysis

question 4

Multiple Choice

All EXCEPT which of the following statements about ABC analysis are true?

• A)In ABC analysis,inventory may be categorized by measures other than dollar volume.
• B)ABC analysis categorizes on-hand inventory into three groups based on annual dollar volume.
• C)ABC analysis is an application of the Pareto principle.
• D)ABC analysis suggests that all items require the same high degree of control.
• E)ABC analysis suggests that there are the critical few and the trivial many inventory items.

---

Definitions:

Replace The Asset

The process of substituting an existing asset with a new or improved version, often due to obsolescence, wear, or technological advances.

Obsolescence Factors

Elements that contribute to the decline in value and usefulness of assets over time, affecting their depreciation.

Expected Repairs

Anticipated maintenance or fixing activities for assets, often projected and budgeted for in financial planning.

Units-Of-Activity

A depreciation method where the expense is based on the number of units the asset produces or hours it operates, rather than the passage of time.