Which of the Following Relationships Shows Dependent Demand Inventory

question 1

Multiple Choice

Which of the following relationships shows dependent demand inventory?

• A) A business purchases a new car when the old one wears out.
• B) A tire maker buys cleaning supplies.
• C) An automaker purchases four tires for each car they produce.
• D) A winemaker buys grapes from farmers in the Columbia Valley.

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Definitions:

Machining

The process of removing material from a workpiece to shape or finish it using machine tools, typically in a manufacturing or engineering setting.

Unit-level Activity

Pertains to the activities or actions that vary directly with the number of units produced or services delivered.

Product-level Activity

Activities and costs associated with a specific product, rather than with a company's operations as a whole.

Plantwide Overhead Rate

A single predetermined overhead rate that is used throughout a plant.