Which of the Following Statements About Just-In-Time Inventory Management Policy

question 11

Multiple Choice

Which of the following statements about just-in-time inventory management policy is NOT true?

• A) It calls for the exact day-by-day, or even hour-by-hour raw material needs to be delivered by the suppliers.
• B) If the supplier fails to make the needed deliveries, then production shuts down.
• C) A big disadvantage in this system is that there are high raw inventory costs.
• D) It eliminates obsolescence or loss to theft.

Grasp the role of financial accounting information in facilitating economic transactions and efficient resource allocation.

Understand the regulatory framework and incentives that guide financial disclosure and reporting.

Understand the distinction between different types of costs: direct, indirect, product-level, batch-level, unit-level, and facility-level.

Appreciate the principles and applications of Activity-Based Costing (ABC).

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Definitions:

Requisition

An official request or demand for goods or services, typically within an organizational setting.

Storeroom

A room or area where materials, goods, supplies, etc., are kept for future use.

Work in Process

Goods that are currently being manufactured but are not yet completed, representing a stage between raw materials and finished goods inventory.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead.