Question

In: Accounting

7. The costs of carrying inventory include all of the following except: * a- Ordering costs....

7. The costs of carrying inventory include all of the following except: *

a- Ordering costs.

b- Cost of warehouse space.

c- Insurance and handling costs.

d- Interest on funds tied up in inventory.

e- None of the above.

8. Once the break-even point is reached: *

a- The contribution margin ratio begins to decrease.

b- The variable expenses will remain constant in total.

c- The total contribution margin changes from negative to positive.

d- The net operating income will increase by the unit contribution margin for each additional item sold.

e- None of the above.

9. Allocated common fixed costs: *

a- Are always incremental costs.

b- Can make a product line appear to be unprofitable.

c- Are always relevant in decisions involving dropping a product line.

d- All of the above.

e- None of the above.

10. If Company C has a higher degree of operating leverage than Company D, then: *

a- Company C is less risky.

b- Company C is more profitable.

c- Company C has higher variable expenses.

d- Company C’s profits are more sensitive to percentage changes in sales.

e- None of the above.

Expert Solution

7. a. Ordering costs

8. d. The net operating income will increase by the unit contribution margin for each additional items sold

9. b. Can make a product line appear to be unprofitable.

10. d. Company C'S profits are more sensitive to percentage changes in sales.

Explanation:

7. The cost of carrying inventory includes the Cost of warehouse space, insurance and handling cost, Interest on funds tied up in Inventory.

8. Variable expenses cost per unit remains constant but cost will change. The contribution margin ratio will increase . Total contribution margin will change.

9. Allocation of common fixed costs can make a product line appear to be unprofitable where in fact the line may be profitable.

10. Higher degree of operating leverage provides the the company has a high proportion of fixed operating costs compared to its variable operating costs. so comany c's profits are more sensitive to percentage change in sales.

ekkarill92 answered 1 year ago

7. The costs of carrying inventory include all of the following except:

7. The costs of carrying inventory include all of the following except: a)Ordering costs. b)Cost of warehouse space. c)Insurance and handling costs. d)Interest on funds tied up in inventory. e)None of the above. 8. Once the break-even point is reached: a)The contribution margin ratio begins to decrease. b)The variable expenses will remain constant in total. c)The total contribution margin changes from negative to positive. d)The net operating income will increase by the unit contribution margin for each...

1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....

1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs. T. True F. False 2- The Economic Order Quantity (EOQ) model tells us........ A. how much to order B. which are higher - holding or ordering costs C. how to use price discounts D. when to order 3- When tracking or counting inventory items, we should focus on which items most? A. A-items B. B-items C. C-items D. D-tems 4- The Economic Order Quantity...

1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....

1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs. T. True F. False 2- The Economic Order Quantity (EOQ) model tells us........ A. how much to order B. which are higher - holding or ordering costs C. how to use price discounts D. when to order 3- When tracking or counting inventory items, we should focus on which items most? A. A-items B. B-items C. C-items D. D-tems 4- The Economic Order Quantity...

List and describe the types of carrying costs and ordering costs?

Six categories of costs associated with inventories are purchasing costs, ordering costs, carrying costs, stock out...

Six categories of costs associated with inventories are purchasing costs, ordering costs, carrying costs, stock out costs, quality costs, and shrinkage. Assume you are seasoned manager training new employees about the importance of inventory management. In 200 words or more, describe at least two of these inventory costs. Include specific examples in order to effectively explain these concepts.

Common examples of variable costs include all of the following except: insurance on factory, direct materials,...

Common examples of variable costs include all of the following except: insurance on factory, direct materials, direct labor, any cost that changes in proportion to the changes in the leve of activity?

Which of the following generates pressure to increase inventories? A) inventory holding costs B) ordering costs...

Which of the following generates pressure to increase inventories? A) inventory holding costs B) ordering costs C) storage and handling costs D) taxes and insurance

Discuss the assumptions that are inherent in production setup cost, ordering cost and carrying costs. How...

Discuss the assumptions that are inherent in production setup cost, ordering cost and carrying costs. How valid are they?

Examples of value-added activities include all of the following except:

Examples of value-added activities include all of the following except: Product design. Material movement. Assembly activities. Establish an effective distribution network.Of the following components of total quality cost, which is most damaging to a company attempting to achieve a reputation as a world-class manufacturer? Prevention costs. Appraisal costs. Internal failure costs External failure costs

68. The benefits of dollarization include the following except for (a) decreases in transaction costs...

68. The benefits of dollarization include the following except for (a) decreases in transaction costs and exchange rate risk as a result of a common currency. (b) increases in trade and investment within the unified currency zone. (c) lower inflation and lower interest rates. (d) the ability of the central bank of a dollarized country to conduct independent monetary policy. 69. Which of the following statements is NOT true? (a) A dollarized country essentially accepts...

Question

7. The costs of carrying inventory include all of the following except: * a- Ordering costs....

Solutions

Expert Solution

Related Solutions

7. The costs of carrying inventory include all of the following except:

1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....

1- Inventory costs include all of these: purchase costs, holding or carrying costs, and ordering costs....

List and describe the types of carrying costs and ordering costs?

Six categories of costs associated with inventories are purchasing costs, ordering costs, carrying costs, stock out...

Common examples of variable costs include all of the following except: insurance on factory, direct materials,...

Which of the following generates pressure to increase inventories? A) inventory holding costs B) ordering costs...

Discuss the assumptions that are inherent in production setup cost, ordering cost and carrying costs. How...

Examples of value-added activities include all of the following except:

68. The benefits of dollarization include the following except for (a) decreases in transaction costs...