Advantages of Just-In Time Inventory Management Are All of the Following

question 8

Multiple Choice

Advantages of just-in time inventory management are all of the following, except:

• A) It decreases the space needed for inventory storage
• B) It makes the firm more independent of external suppliers
• C) It minimises inventory insurance costs
• D) It increases manufacturing flexibility

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold in a company, including materials, labor, and manufacturing overhead.

Cost of Goods Available

The total cost of inventory that is available for sale at the beginning of a period, including purchases made during that period.

Schedule of Cost

A detailed list showing the various components contributing to the total cost of manufacturing a product or providing a service.

Underapplied Manufacturing Overhead

The situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.