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Inventory Management, Just in Time and Costing Methods
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Inventory Management, Just in Time and Costing Methods – MCQs
31 questions. Click to practice.
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Correct options are highlighted when revealed.
1.
When combining relevant ordering expenses with relevant holding expenses, what is the resulting calculation called?
relevant total costs
contribution costs
throughput costs
optimized costs
variable costs
2.
To determine ____________, you multiply the purchase order lead time by the quantity of units sold within a given time period.
storage expenses
total applicable expenses
optimal order quantity
reorder point
order processing time
3.
To determine ___________, the reorder point is divided by the quantity of units sold per time period.
applicable inventory holding cost
applicable ordering expense
duration of a purchase order cycle
total count of purchase orders
4.
In the manufacturing process, what is the term for the phase when accounting journal entries are recorded?
linking stage
entry phase
initiation point
trigger point
activation phase
5.
Which costing method involves skipping certain journal entries in the accounting process?
just-in-time costing
event-driven costing
backflush costing
lead-time costing
process costing
6.
To determine ___________, the relevant incremental costs are combined with the appropriate opportunity cost of capital.
expenses related to purchase orders
applicable costs for holding inventory
non-essential inventory holding expenses
pertinent costs associated with ordering
7.
What do you obtain by multiplying the average inventory units by the yearly relevant carrying cost per unit?
Yearly irrelevant ordering expenses
Yearly relevant carrying expenses
Yearly relevant ordering expenses
Yearly irrelevant carrying expenses
8.
Given an annual demand of 18,000 units, a relevant ordering cost of $150 per order, and an order size of 1,500 units, what is the total relevant ordering cost for the year?
$200
$190
$160
$180
9.
What term describes the organized movement of products, services, or information from the procurement of raw materials to the final delivery to customers?
supply chain
value chain
material flow chain
production flow chain
distribution network
10.
To determine __________, the required rate of return is multiplied by the cost per unit of purchased inventory.
non-essential inventory holding expenses
the pertinent opportunity cost of capital
significant purchase order expenses
important inventory holding charges
11.
Which category includes expenses related to product defects, error prevention, and quality assessments?
Inventory holding expenses
Costs due to inventory shortages
Quality-related costs
Losses from product shrinkage
Operational overheads
12.
Given an average inventory of 2,000 units and an annual carrying cost of $5 per unit, what is the total annual carrying cost?
$5,000
$4,500
$5,500
$6,000
13.
Which of the following represents a type of cost associated with purchasing?
transportation fees for delivery
expenses for warehousing
insurance charges
losses due to product damage
maintenance expenses
14.
Given an annual demand of 25,000 units, an ordering cost of $210 per order, and a holding cost of $25 per unit, what is the Economic Order Quantity (EOQ)?
678 units
648 units
658 units
668 units
15.
Which category encompasses tasks involving the coordination, control, and planning of inventory movement?
management of decision processes
management of production flow
management of inventory
management of manufacturing operations
16.
How are the expenses related to items bought from vendors categorized?
Costs due to inventory shortages
Expenses for placing orders
Costs associated with storing inventory
Costs incurred from purchasing goods
Transportation expenses
17.
What term describes the profit lost when capital is tied up in inventory instead of being invested elsewhere?
applicable expenses for purchase orders
applicable costs associated with holding inventory
non-applicable costs related to carrying inventory
applicable opportunity cost of invested capital
18.
Given that the incremental costs amount to $5,000 and the opportunity cost of invested capital is $2,500, what is the total relevant inventory carrying cost?
$7,500
$7,000
$6,500
$6,000
19.
To determine ____________, the quantity of purchase orders per year is multiplied by the associated ordering cost for each order.
yearly non-essential ordering expenses
yearly applicable holding expenses
yearly applicable ordering expenses
yearly non-essential holding expenses
20.
Which costing approach focuses on the entire value stream to generate customer value instead of concentrating on separate departments or individual products?
financial accounting
post-process accounting
lean accounting
forward accounting
activity-based accounting
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