What Unit of Control Is Suitable for Firms with Large

question 8

Multiple Choice

What unit of control is suitable for firms with large amounts of inventory at a relatively low per-unit value?

• A) ABC analysis
• B) Dollar inventory control
• C) Per unit inventory control
• D) Minimum-turnover method

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Definitions:

Step-Down Method

A cost allocation method that sequentially allocates service department costs to other service departments and then to production departments.

Janitorial Department

A division within an organization dedicated to the maintenance and cleaning of buildings and facilities.

Allocated Based on Space

The distribution of resources or costs among departments or projects according to the physical area they occupy or require.

Personnel Department Cost

Expenses related to the operation of a human resources department, including salaries, training, and benefits administration.