Answered: In a single period inventory model, it…

In a single period inventory model, it is optimal to order MORE than the expected demand if the cost of having a shortage is greater than the cost of having a surplus. True O False

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 2DQ: Explain why, in the traditional view of inventory, carrying costs increase as ordering costs...

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Similar questions

Which of the following statements is NOT true of Economic Order Quantity? O A. The economic order quantity mathematically determines the minimum total inventory cost B. The EOQ is directly proportional to the sales per period O C. The optimal order size is determined by the EOQ model D. The EOQ ignores inventory reorder costs and inventory carrying costs
When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?
An advantage of the weighted average inventory method is that it smooths out erratic changes in costs. True or False True False
During a period of rising inventory prices the LIFO cost flow method will result in higher total assets than FIFO. True or False True False
Identify that if prices are rising, which inventory cost flow method will produce the highest amount of ending inventory? A. Weighted average B. LIFO C. FIFO S. LIFO, FIFO, and weighted average will all produce the same amount of cost of goods sold.
If prices are rising, which inventory cost flow method will produce the lowest amount of cost of goods sold? Multiple Choice Weighted average. LIFO, FIFO, and the weighted-average inventory cost flow methods will all produce equal amounts of cost of goods sold. FIFO. LIFO.
When inventory unit costs are increasing: Group of answer choices a)FIFO will result in higher ending inventory than will LIFO b)LIFO will result in higher ending inventory than will FIFO c)FIFO will result in higher cost of goods sold than will LIFO d)FIFO will result in higher net income and lower ending inventory than LIFO
Which of the following statements is correct? Group of answer choices A)The choice of an inventory costing method is dependent upon the actual physical flow of the inventory. B)LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet. C)FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet. D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.
Which cost flow assumption generally results in the highest reported amount of net income in periods of rising inventory costs? Multiple Choice LIFO. FIFO. Weighted-average. Income will be the same under each assumption.
During periods when costs are rising and inventory quantities are stable, cost of goods sold will be: Multiple Choice Lower under average cost than LIFO. Higher under FIFO than average cost. Lower under LIFO than FIFO. Higher under FIFO than LIFO.
Which cost flow assumption generally results in the highest reported amount for ending inventory when inventory costs are rising? Explain.
Which of the following is an assumption of cost-volume-profit analysis? a. The inventory quantities during the period can change. b. Within the relevant range of operating activity, the efficiency of operations can change. c. Costs can be divided into fixed and variable components. d. The sales mix can vary. 5 Which of the following is an assumption of cost-volume-profit analysis? a. The inventory quantities during the period can change. b. Within the relevant range of operating activity, the efficiency of operations can change. c. Costs can be divided into fixed and variable components. d. The sales mix can vary.