The Presence of Any of the Following Factors Would Suggest

question 8

Multiple Choice

The presence of any of the following factors would suggest a switch to ABC EXCEPT when

• A)product lines differ greatly in volume.
• B)overhead costs constitute a minor portion of total costs.
• C)the manufacturing process has changed significantly.
• D)production managers are ignoring data provided by the existing system.

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Definitions:

Service Company

A business that provides intangible products (services) to consumers, as opposed to selling physical goods.

Inventory Shrinkage

The loss of products between purchase and sale due to theft, damage, or errors, resulting in lower inventory levels than recorded.

Managers

Individuals responsible for controlling or administering all or part of a company or similar organization.

Periodic Inventory

a system of inventory management where updates to inventory levels are made at specific intervals, usually at the end of an accounting period.