Inventory Needs Under a Derived-Demand Inventory System Are

question 28

Multiple Choice

Inventory needs under a derived-demand inventory system are:

• A)primarily dependent upon the competitive demands placed on a firm's suppliers.
• B)based on the anticipated demand for the finished product.
• C)based on minimizing the cost of restocking inventory.
• D)held constant over time.
• E)determined by a kanban system.

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Definitions:

Cost of Goods Sold

The costs directly associated with producing a company's goods for sale, including expenses for labor and materials.

Inventory Account

Inventory Account is an asset account on the balance sheet that reports the value of a company's inventory - raw materials, work-in-process, and finished goods.

Factory Overhead

Manufacturing costs that are not raw material or direct labor costs.

Raw Materials

The basic materials from which products are manufactured or made.