Inventory Shrinkage ____

question 29

Multiple Choice

Inventory shrinkage ____.

• A) is another name for inventory turnover
• B) refers to the fact that more items are recorded entering than leaving warehousing facilities
• C) refers to situations where the size and/or volume of inventory is decreased over time
• D) refers to a technique of stabilizing unit loads by using shrink wrap packaging

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Definitions:

Unit Product Cost

The total cost (both fixed and variable) associated with producing a single unit of a product.

Additional Contribution Margin

The increase in contribution margin generated by an additional unit of sales, reflecting the revenue minus variable costs for that unit.

Purchasing Decision

The process of evaluating and choosing from among alternatives to buy products or services that best meet the criteria of the purchaser.

Variable Production Cost

Costs that vary with the level of production output, including direct materials, direct labor, and variable manufacturing overhead.