Which One of the Following Factors Usually Motivates a SMALLER

question 29

Multiple Choice

Which one of the following factors usually motivates a SMALLER capacity cushion?

• A) unevenly distributed demands
• B) high penalty costs for overtime usage
• C) requests for quick customer services
• D) high capital intensity

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Definitions:

Periodic Inventory System

An accounting method where the inventory level is updated in the accounting records at specific intervals, rather than after each sale or purchase.

Perpetual Inventory System

An inventory management method where stock levels are updated in real-time with each sale or purchase.

Purchases Discounts

Reductions in price offered by suppliers to buyers as an incentive for early payment of their purchase invoices.

Periodic Inventory System

An inventory valuation method where updates to inventory levels are made periodically, typically at the end of an accounting period, rather than after each sale or purchase.