If the Level of Inventory Rises, All Else Constant, Then

question 335

Multiple Choice

If the level of inventory rises, all else constant, then:

• A) The days' sales in inventory will also rise.
• B) The NWC ratio will also rise.
• C) Inventory turnover will also rise.
• D) Fixed asset turnover will decline.
• E) Current ratio will decline.

Identify the components that make up manufacturing overhead and understand their variable and fixed nature.

Calculate the application of manufacturing overhead to specific jobs and understand the impact on job costing.

Understand the role and computation of a bill of materials in manufacturing.

Analyze the effect of under- or over-applied overhead on job cost and the overall importance of accurate overhead allocation.