Which Best Defines the Gross Requirements for a Component Item

question 90

Multiple Choice

Which best defines the gross requirements for a component item?

• A) the forecasted customer demand for the component
• B) the total demand for the component derived from all immediate parents
• C) the sum of gross requirements for all parents of the component
• D) the amount of safety stock needed to buffer against uncertainties

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Definitions:

Unsold Units

Unsold units refer to products that have been produced or acquired by a business but have not yet been sold to customers.

Variable Costing

A costing method that only includes variable production costs—costs that change with the level of output—in product pricing.

Unsold Units

Inventory items that have not been sold during a specific period, representing stock still available for sale.

Absorption Costing

A cost calculation approach encompassing all production expenses, such as direct materials, direct labor, along with both variable and fixed overhead costs, in determining the price of a product.