List and Briefly Discuss Three Measures That Can Be Taken

question 152

Essay

List and briefly discuss three measures that can be taken to maintain good controls over merchandise inventory.

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Definitions:

Fixed Costs

Expenses that do not change in proportion to the activity of a business.

Net Income

Net income is the total earnings of a company after all expenses and taxes have been deducted from revenues, indicating the company's profitability over a specific period.

Sales

The total amount of money received by a company for goods or services sold during a certain time period.

Margin of Safety Ratio

This ratio measures the difference between actual or expected sales and sales at the break-even point, indicating the buffer against a loss.