Types of Inventory Costs Classification Quiz
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Questions and Answers

What is the cost associated with goods partially completed at the end of the period?

  • Finished Goods Inventory
  • Ordering Cost
  • Raw Materials Inventory
  • Work-in-process Inventory (correct)

    • What type of costs are associated with physical handling of goods, insurance, security, and IT hardware?

  • Inventory service costs (correct)
  • Facility maintenance costs
  • Spoilage costs
  • Inventory risks costs

    • Which of the following costs involves storing inventory before it is sold?

  • Work-in-process Inventory
  • Raw Materials Inventory
  • Holding costs (correct)
  • Ordering Cost

    • Which of the following is a major cost under Inventory risks costs?

    <p>Shrinkage</p> Signup and view all the answers

    What type of cost includes the opportunity cost of the money invested in inventory?

    <p>Inventory financing costs</p> Signup and view all the answers

    What type of costs occur when businesses become out of stock for any reason?

    <p>Spoilage costs</p> Signup and view all the answers

    Which factor is highlighted as the frontline for preventing spoilage and waste?

    <p>Solid Inventory Control</p> Signup and view all the answers

    Which cost is essentially incurred every time you place an order from your supplier?

    <p>Ordering Cost</p> Signup and view all the answers

    Which of the following best describes 'imputed cost'?

    <p>A hidden cost incurred when an asset is used for another purpose</p> Signup and view all the answers

    What would be an example of an 'out of pocket cost' based on the provided context?

    <p>Buying snacks after class as a personal expense</p> Signup and view all the answers

    In the context of this case, which cost can be avoided by reducing the number of classes offered?

    <p>Wages and salaries</p> Signup and view all the answers

    What category does 'utilities cost' fall under in the context of cost classifications?

    <p>Holding costs</p> Signup and view all the answers

    Direct costs are costs that can be easily traced to a specific cost object, such as a product or department.

    <p>True</p> Signup and view all the answers

    Uncontrollable costs include direct materials, direct labor, and some overhead expenses.

    <p>False</p> Signup and view all the answers

    In an organization, more costs are controllable at lower levels of management compared to higher levels.

    <p>False</p> Signup and view all the answers

    Uncontrollable costs refer to costs that can be directly influenced or managed by a specific manager or department.

    <p>False</p> Signup and view all the answers

    Controllable costs are mostly fixed costs that cannot be influenced by the management's actions.

    <p>False</p> Signup and view all the answers

    Fixed costs are costs that change in direct proportion to the level of production or sales.

    <p>False</p> Signup and view all the answers

    Direct material cost per unit is an example of a fixed cost.

    <p>False</p> Signup and view all the answers

    Uncontrollable costs are costs that can be influenced or changed by the actions of a specific responsibility center.

    <p>False</p> Signup and view all the answers

    Controllable costs refer to costs that a manager can influence through decisions and actions within their control.

    <p>True</p> Signup and view all the answers

    Fixed costs are costs that vary in total with changes in the level of activity, but remain constant per unit.

    <p>False</p> Signup and view all the answers

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