Which Measure(s) Is(are) Useful in Evaluating the Efficiency in Managing

question 215

Multiple Choice

Which measure(s) is(are) useful in evaluating the efficiency in managing inventories? 1. Inventory turnover
2) Days in inventory

• A) 1 only.
• B) 2 only.
• C) Both 1 and 2.
• D) Neither 1 nor 2.

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Definitions:

Budget Performance

The comparison of actual financial outcomes against the planned or budgeted amounts.

Standard Costs

Predetermined costs assigned to goods and services, used as benchmarks for measuring performance and preparing budgets.

Actual Costs

The real expenses that a company incurs in producing goods or services.

Standard Costs

Predetermined costs assigned to goods and services, used as a benchmark for evaluating actual production costs.