Which of the Following Might Be Attributed to Efficient Inventory

question 46

Multiple Choice

Which of the following might be attributed to efficient inventory management?

• A) High inventory turnover ratio.
• B) Low incidence of production schedule disruptions.
• C) High total asset turnover.
• D) All of the above.
• E) Only answers a and c above.

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Definitions:

Variable Costing

A costing method in which all variable manufacturing costs are included as inventory costs, while fixed manufacturing overhead is treated as an expense in the period incurred.

External Reporting

External reporting involves the preparation and presentation of financial statements and other reports by a company to provide financial and operational information to external stakeholders, such as investors, creditors, and regulatory agencies.

Absorption Costing

An accounting method that includes all manufacturing costs in the cost of a product.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance premiums.