In Making Any Decision That Affects Inventory Size, Which of the Following

question 71

Multiple Choice

In making any decision that affects inventory size, which of the following costs do not need to be considered?

• A) Holding costs
• B) Setup costs
• C) Ordering costs
• D) Fixed costs
• E) Shortage costs

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Definitions:

Cumulative Effect

The total change in financial statement results over a period of time due to an accounting principle change or correction of an error.

Straight-Line Method

A method of allocating the cost of an asset evenly over its useful life.