Which of the Following Statements Concerning ABC Analysis Is False

question 109

Multiple Choice

Which of the following statements concerning ABC analysis is false?

• A) Class B items typically account for 20 percent of the company's business in dollars
• B) There are typically less class A items in stock than class B.
• C) Class C items typically account for 70 percent of the company's inventory items.
• D) Class C items tend to have more complex inventory policies than Class B items
• E) Class B items typically account for 20 percent of the company's business in dollars.

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Definitions:

Quarterly Profits

The net earnings or losses of a company calculated every three months within a fiscal year.

Patent

A legal authorization granted to an inventor to exclusively manufacture, use, or sell an invention for a certain number of years.

Ordinary Annuity

A series of equal payments made at regular intervals, with interest compounded at the end of each period.

Nominal Interest

The stated or advertised rate of interest on a loan or investment, not accounting for inflation or compounding effects.