A Public Accountant Examining Inventory May Appropriately Apply Sampling for Attributes

question 18

Multiple Choice

A public accountant examining inventory may appropriately apply sampling for attributes in order to estimate the

• A)average price of inventory items.
• B)percentage of slow-moving inventory items.
• C)dollar value of inventory.
• D)physical quantity of inventory items.

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Definitions:

Overhead

General business expenses that are not directly tied to specific products or services but are necessary for the overall operation of a business, such as rent, utilities, and administrative costs.

Activity-Based Costing

A costing methodology that assigns overhead and indirect costs to specific activities, improving the accuracy of product and service costing.

Materials Handling Cost

The expenses associated with moving, protecting, and storing goods within a warehouse or manufacturing facility.

Material Moves

Refers to the process or cost associated with moving raw materials and parts through a manufacturing or production facility.