For a Company Using FIFO-And Assuming Rising Prices-Large Purchases of Inventory

question 37

Multiple Choice

For a company using FIFO-and assuming rising prices-large purchases of inventory near the end of the year will:

• A)increase the value of ending inventory.
• B)increase income taxes paid.
• C)increase gross profit.
• D)result in all of the above.

Identify the fundamental issues in inventory management, including selection of items for order and choice of suppliers.

Grasp the concept and application of ABC analysis in inventory management for prioritizing inventory control efforts.

Understand the impact of setup costs on the economic order quantity and how reductions in setup time affect order quantities.

Recognize the causes and implications of inventory shrinkage in a retail context.

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Definitions:

Premature Commitment

An early decision or dedication to a course of action or belief without sufficient information or experience.

Ineffective Communication

The failure to convey or share information in a way that is understood by others, leading to misunderstandings or conflicts.

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A state of weariness or dissatisfaction resulting from a lack of interest, excitement, or engagement with activities.

Unavailability

The state of being not obtainable or not able to be accessed.