Benefits of Maintaining Inventory Records on a Perpetual Basis Include

question 42

Multiple Choice

Benefits of maintaining inventory records on a perpetual basis include all of the following except:

• A)provides improved cost control.
• B)avoid annual physical counts.
• C)easier to identify potential shortages.
• D)improved customer experiences.

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Definitions:

Manufacturing Overhead

All costs incurred in the production process that cannot be directly attributed to specific units produced, such as maintenance and utilities.

Conversion Cost

The sum of direct labor and manufacturing overhead costs, representing the costs needed to convert raw materials into finished goods.

Direct Materials

These are the raw materials that are directly incorporated into a finished product.

Prime Cost

The combined direct costs of raw material and labor that are directly associated with the production of a product.