The Gross Profit Method of Estimating Inventory Would NOT Be

question 125

Multiple Choice

The gross profit method of estimating inventory would NOT be useful when

• A) A periodic system is in use and inventories are required for interim statements
• B) Inventories have been destroyed or lost by fire, theft, or other casualty, and the specific data required for inventory valuation are not available
• C) There is a significant change in the mix of products being sold
• D) The relationship between gross profit and sales remains stable over time

Identify relevant and irrelevant costs in decision-making regarding selling or further processing of products.

Rank products in order of profitability based on their use of a constrained resource.

Calculate the financial impact of accepting special orders on annual financials under various production and capacity scenarios.

Understand the concept of constraints in a production facility and how to identify them.

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Definitions:

Procedural Memory

The memory system involved in the unconscious retention and retrieval of learned motor skills and habits.

Declarative Memory

A type of long-term memory that involves the ability to recall factual information, such as events and facts.

Explicit Memory

The type of long-term memory involving conscious recollection of factual information, previous experiences, and concepts.

Implicit Memory

A type of memory that enables the use of objects or skills without conscious or intentional recollection of learning them.