What Implies That About 20% of the Inventory Items Will

question 42

Multiple Choice

What implies that about 20% of the inventory items will account for about 80% of the inventory value?

• A) Little's law
• B) Friedman's law
• C) Pablo's proposition
• D) Keyne's law
• E) Pareto's law

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Definitions:

Traditional Costing

An accounting method that applies indirect costs to products based on a predetermined overhead rate, typically simpler than activity-based costing.

Activity-Based Costing

A costing methodology that assigns the costs of resources to products or services based on activities and processes involved in their production.

Traditional Costing Method

A cost accounting method that assigns overhead costs to products based on a predetermined overhead rate.

Direct Labor-Hours

A measure representing the total hours worked by employees directly involved in the production of goods or services.