ABC Analysis Divides On-Hand Inventory into Three Classes, Generally Based

question 110

Multiple Choice

ABC analysis divides on-hand inventory into three classes, generally based upon

• A) item quality
• B) unit price
• C) the number of units on hand
• D) annual demand
• E) annual dollar volume

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Definitions:

Finance Perspective

A viewpoint or method of considering financial aspects and impacts in decision making or analysis.

Capacity Utilization

The percentage of a company or factory's total production capacity that is currently being used.

Pro Forma Statement

An anticipated financial document generated based on hypothetical events and transactions that are yet to happen.

Sustainable Rate Growth

The maximum rate at which a company can grow its revenues without needing to obtain additional financing or reduce dividend payments.