cost accounting chapter 20.docVIP

Cost Accounting, 14e (Horngren/Datar/Rajan) Chapter 20 Inventory Management, Just-in-Time, and Simplified Costing Methods Objective 20.1 1) Which of the following industries would have the highest cost of goods sold percentage relative to sales? A) computer manufacturers B) retail organizations C) drug manufacturers D) The percentage will usually depend on the success of a particular company. Answer: B Diff: 2 Terms: inventory management Objective: 1 AACSB: Reflective thinking 2) The costs of goods acquired from suppliers including incoming freight or transportation costs are: A) purchasing costs B) ordering costs C) stockout costs D) carrying costs Answer: A Diff: 2 Terms: purchasing costs Objective: 1 AACSB: Reflective thinking 3) The costs of preparing, issuing, and paying purchase orders, plus receiving and inspecting the items included in orders is: A) purchasing costs B) ordering costs C) stockout costs D) carrying costs Answer: B Diff: 2 Terms: ordering costs Objective: 1 AACSB: Reflective thinking 4) The costs that result from theft of inventory are: A) shrinkage costs B) external failure costs C) stockout costs D) costs of quality Answer: A Diff: 2 Terms: shrinkage Objective: 1 AACSB: Reflective thinking 5) The costs that result when a company runs out of a particular item for which there is a customer demand are: A) shrinkage costs B) shortage costs C) stockout costs D) EOQ estimation costs Answer: C Diff: 2 Terms: stockout costs Objective: 1 AACSB: Reflective thinking 6) The costs that result when features and characteristics of a product or service are NOT in conformance with the specifications are: A) inspection costs B) costs of quality C) purchasing costs D) design costs Answer: B Diff: 2 Terms: stockout costs Objective: 1 AACSB: Reflective thinking 7) The costs that result when a company holds an inventory of goods for sale: A) purchasing costs B) carrying costs C) opportunity costs