Which of the Following Is TRUE Regarding the Fixed-Quantity Ordering

question 66

Multiple Choice

Which of the following is TRUE regarding the fixed-quantity ordering system?

• A) Inventory is ordered at the end of a given period.
• B) There is a prespecified target level T.
• C) The same fixed amount is added to inventory every time an order for an item is placed.
• D) There is no physical count of inventory items after an item is withdrawn.
• E) It is suitable when vendors make routine visits to customers to take fresh orders.

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Definitions:

Ledger

A group of accounts for a business.

Price And Quantity Variances

The difference between the actual and expected costs, analyzed through the perspectives of price paid and the quantity used.

Standard Costs

Standard costs are the expected costs of manufacturing a product under normal conditions, including direct labor, direct materials, and factory overhead.

Standard Costs

Predetermined or estimated costs used for planning and control purposes in budgeting and cost management.