In the ABC System,inventory Is Categorized Based Upon

question 18

Multiple Choice

In the ABC System,inventory is categorized based upon:

• A) volume
• B) color
• C) dollar investment
• D) none of the above

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Definitions:

Simple Rate Of Return

A calculation used to evaluate the profitability of an investment, determined by dividing the annual incremental net operating income by the initial investment cost.

Salvage Value

The expected residual worth of an asset upon the conclusion of its effective lifespan.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.

Incremental Cost Approach

Refers to the analysis of the additional costs that are incurred when making business decisions, focusing on the costs that change with the level of activity.