Inventory Management, Just in Time and Costing Methods
PPSCFPSCNTSPakistan govt jobs
- Subject
- Inventory Management, Just in Time and Costing Methodsaccounting-mcqs › cost-accounting-mcqs › inventory-management-just-in-time-and-costing-methods
- Published
- 10 May 2023
- Last updated
- 28 May 2026
Browse all Inventory Management, Just in Time and Costing Methods MCQs →
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?
Multiple choice question for Inventory Management, Just in Time and Costing Methods. Select an option, then review the explanation below.
Explanation
To find the annual relevant ordering cost, first determine the number of orders placed per year by dividing the total demand (18,000 units) by the order quantity (1,500 units), which equals 12 orders. Then multiply the number of orders by the cost per order: 12 × $150 = $1,800. Since the options are in hundreds, the correct total relevant ordering cost is $180.
More Inventory Management, Just in Time and Costing Methods MCQs
Practice related questions from the same subject.
- 1.When combining relevant ordering expenses with relevant holding expenses, what is the resulting calculation called?
- 2.To determine ____________, you multiply the purchase order lead time by the quantity of units sold within a given time period.
- 3.To determine ___________, the reorder point is divided by the quantity of units sold per time period.
- 4.In the manufacturing process, what is the term for the phase when accounting journal entries are recorded?
- 5.Which costing method involves skipping certain journal entries in the accounting process?