Question : Objective 20.1 1) Among different types of costs associated with inventory, : 1211960

Objective 20.1

1) Among different types of costs associated with inventory, the costs of obtaining purchase approvals are ________.

A) purchasing costs

B) ordering costs

C) stockout costs

D) carrying costs

2) Among different types of costs associated with inventory, the incoming freight charges of inventories are ________.

A) purchasing costs

B) ordering costs

C) stockout costs

D) carrying costs

3) Among different types of costs associated with inventory, the opportunity cost of the investment tied up in inventory is a(n) ________.

A) purchasing cost

B) ordering cost

C) stockout cost

D) carrying cost

4) The costs that result from theft of inventory are ________.

A) shrinkage costs

B) external failure costs

C) stockout costs

D) costs of quality

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

6) Among different types of costs associated with inventory, the costs that result when features and characteristics of a product or service are not in conformance with the customer specifications are ________.

A) EOQ estimation costs

B) costs of quality

C) purchasing costs

D) shrinkage costs

7) Which of the following statements is true of costs associated with goods for sale?

A) Appraisal costs is a subcategory of shrinkage costs.

B) Special processing costs are always part of purchasing costs.

C) All inventory costs are not available in financial accounting systems.

D) Stockout costs are costs that arise when a company runs out of a particular item for which there is no customer demand.

8) Among different types of costs associated with inventory, four categories of quality costs are ________.

A) control costs, inspection costs, internal failure costs, and external failure costs

B) prevention costs, inspection costs, internal failure costs, and external failure costs

C) prevention costs, appraisal costs, internal failure costs, and external failure costs

D) prevention costs, control costs, internal failure costs, and external failure costs

9) Which of the following statements is true of costs associated with goods for sale?

A) Information-gathering technology increases the reliability and timeliness of inventory information and increases the costs related to inventory.

B) Opportunity costs are not recorded in financial accounting systems because they are not a significant component in several cost categories.

C) The costs of receiving and inspecting the items are included in the purchase orders are ordering costs.

D) Opportunity costs are recorded in financial accounting systems but are a not significant component in several cost categories.

10) Most firms try not to hold more inventory than necessary because shrinkage costs generally decrease when a firm’s inventory increases.