Machine Downtime Due to Failures in the Process, Scrap, and Rework

question 91

Multiple Choice

Machine downtime due to failures in the process, scrap, and rework are examples of __________ costs.

• A) Internal failure
• B) External failure
• C) Appraisal
• D) Prevention
• E) Replacement

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Definitions:

Internal Control

Methods and practices put in place by an organization to guarantee the accuracy of financial and accounting data, encourage responsibility, and inhibit fraudulent activities.

Physical Inventory

The process of counting and verifying the actual quantities of goods in stock at a particular time.

Inventory Cost Formulas

Methods used to determine the cost of inventory sold and ending inventory value, such as FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and weighted average cost.

FIFO

First In, First Out, an inventory valuation method that assumes that the first items placed in inventory are the first sold.