An Advantage of a Just-In-Time Inventory System Is _________

question 54

Multiple Choice

An advantage of a just-in-time inventory system is _________.

• A)fewer managerial controls on inventory
• B)lower inventory holding costs
• C)larger shipment and production lots
• D)fewer orders per operational year
• E)more inspection and handling of materials

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Definitions:

Variable Costing

An accounting method that only considers variable costs (costs that fluctuate with production levels) in the calculation of product cost.

Absorption Costing

A costing approach that encompasses all costs associated with production, including direct materials, direct labor, and all overhead costs, both variable and fixed, in the unit cost of a product.

Ending Inventory

The total value of all unsold goods a company has at the end of an accounting period.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the basic profitability of the products or services sold.