Which of the Following Statement Is Correct

question 109

Multiple Choice

Which of the following statement is correct?

• A)Items in the A classification should be controlled under a perpetual inventory system with as much detail as necessary.
• B)Control of B items should rely more on periodic control systems and basic analytical tools such as EOQ and reorder point analysis.
• C)C items typically constitute a minor proportion of the small firm's inventory value and,as a result,require the least effort and expense to control.
• D)All of the above

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Definitions:

Labor Rate

The amount paid to an employee per unit of time, usually per hour or year.

Direct Materials Purchase Budget

A financial plan that estimates the quantities and costs of direct materials to be purchased to meet production requirements.

Ending Inventories

Ending inventories refer to the final amount of goods available for sale or use at the end of an accounting period.

Direct Labor Budget

A financial plan that estimates the cost of direct labor needed to meet production needs within a specific timeframe.