The cost of inventory is relevant when deciding whether to dispose of the inventoryin cases of obsolescence.
举一反三
- Unavoidablecosts are never relevant in deciding whether to eliminate a product or department.
- Depreciationon new equipment is relevant in deciding whether to keep or replace equipment.
- Gainor loss on disposal of equipment is relevant in deciding whether to keep orreplace equipment.
- When does the cost of inventory become an expense? A: When inventory is purchased from the supplier. B: When cash is collected from the customer. C: When payment is made to the supplier. D: When inventory is delivered to a customer.
- Which of the following might motivate keeping a high level of inventory A: decreasing variability in demand B: high risk of product obsolescence C: item cost that does not change depending on order quantity D: a complex setup process when switching between production of two different products