Generally,ordering Costs Are the Single Most Important Cost Element in Inventory

question 88

True/False

Generally,ordering costs are the single most important cost element in inventory management,because they are greater in magnitude than carrying costs.

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Definitions:

Double-Declining-Balance Method

A method of accelerated depreciation which computes depreciation expense by doubling the straight-line rate and applying it to the book value of the asset at the beginning of each year.

Depreciation Expense

Depreciation expense is the allocation of the cost of a tangible asset over its useful life, reflecting wear and tear, decay, or decrease in value.

Salvage Value

The estimated resale value of an asset at the end of its useful life, typically considered in depreciation calculations.

Useful Life Estimate

The period over which a fixed asset is expected to be usable by a company, affecting depreciation calculations.