Counting Different Parts of Inventory at Different Times of the Year

question 80

Multiple Choice

Counting different parts of inventory at different times of the year is called

• A)LIFO inventory.
• B)Inventory cutoff.
• C)Cycle counting.
• D)Just-in-time inventory.

---

Definitions:

Period Cost

Expenses that are not directly tied to production activity and are accounted for within the period they occur, such as selling and administrative expenses.

Net Operating Income

Earnings before interest and taxes (EBIT), representing the profit from regular business operations.

Common Fixed Expenses

Costs that do not change with the level of production or sales over a certain period and are shared among different segments or products of a business.

Total Fixed Expenses

Expenses that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.