Which of the Following Is Not True Concerning Replenishment Orders

question 66

Multiple Choice

Which of the following is not true concerning replenishment orders?

• A) They are generated when there is not enough inventory.
• B) MRP specifies when to place the order.
• C) The order may be for material from a supplier.
• D) They are orders for the final product.
• E) The order may be for material from the manufacturing floor.

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Definitions:

Historical Cost

The original cost at which an asset is acquired and recorded in the financial statements, not adjusted for inflation or market changes.

Replacement Cost

The cost to replace an asset of a company at the present time, according to its current worth.

Net Realizable Value

Net Realizable Value is the estimated selling price of goods minus the costs of their sale or completion, used to value inventory or accounts receivable in the context of impairments or realizable value considerations.

Normal Profit Margin

The average amount by which a company's sales exceed its cost of goods sold and operating expenses, representing a standard level of profit.