QUESTION: 309

The economic order quantity for inventory is higher for an organization that has:

Lower annual unit sales.
Higher fixed inventory ordering costs.
Higher annual carrying costs as a percentage of inventory value.
A higher purchase price per unit of inventory.

Answer(s): B

QUESTION: 310

What must be monitored in order to manage risk of consumer product inventory obsolescence?

1. Inventory balances.
2. Market share forecasts.
3. Sales returns.
4. Sales trends.

1 only
4 only
1 and 4 only
1, 2, and 3 only

Answer(s): C

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QUESTION: 311

The percentage of sales method, rather than the percentage of receivables method, would be used to estimate uncollectible accounts if an organization seeks to:

Use an aging schedule to more closely estimate uncollectible accounts.
Eliminate the need for an allowance for doubtful accounts.
Emphasize the accuracy of the net realizable value of the receivables on the balance sheet.
Use a method that approximates the matching principle.

Answer(s): D

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