Mendelsohn Company Keeps 20 Days of Materials Inventory on Hand

question 113

Multiple Choice

Mendelsohn company keeps 20 days of materials inventory on hand to avoid shutdowns due to materials shortages. Carrying costs average $4,000 per day. Bach, Inc., a competitor, keeps 10 days of inventory on hand, and the competitor's carrying costs average $2,000 per day.
The value-added costs are

• A)$0.
• B)$40,000.
• C)$20,000.
• D)$80,000.

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Definitions:

Bobo Doll

An experiment conducted by Albert Bandura to demonstrate how children mimic aggressive behaviors observed in adults.

Aggression

Behavior intended to harm or intimidate others, which can be physical or verbal.

Bandura

A psychologist known for his work on social learning theory and the concept of self-efficacy.

Observation

The process of closely monitoring or watching something or someone to gain information.