MDX Sales Corp

question 50

Multiple Choice

MDX Sales Corp.is expecting a 10% increase in sales next year.MDX has an inventory balance of $1,000,000 and uses the percent of sales forecasting method.Which of the following could explain why the inventory forecast of $1,100,000 might be too high?

• A) The current inventory balance of $1,000,000 is lower than usual because of a one-time end of year fire sale.
• B) The company is going to change its depreciation method in the coming year.
• C) The growth in sales could be as high as 15%.
• D) A fixed amount of inventory is required to do business, so inventory doesn't increase proportionally with sales.

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Definitions:

Shelves

Flat horizontal surfaces made of various materials, used for holding or displaying items in a organized manner.

Color-coding

The use of colors to identify, classify, or organize items or information in an intuitive and visual manner.

Terminal Digit Filing

A filing system that organizes records by the last number of a sequence, facilitating evenly distributed and scalable storage.

Numeric Filing

An organizational system for documents or records based on numbers for easy identification and retrieval.