Multiple Choice
Which of the following is an advantage of using the perpetual inventory system over the periodic inventory system when calculating Cost of Goods Sold (COGS)?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following costs are most likely to be controllable at the production supervisor level?
A
Direct labor costs
B
Depreciation on factory equipment
C
Property taxes on the manufacturing facility
D
Insurance expense for the entire company
Verified step by step guidance1
Understand the concept of controllable costs: Controllable costs are those that a manager or supervisor can influence or change within their area of responsibility during a specific time period.
Analyze each cost provided in the problem: Direct labor costs, depreciation on factory equipment, property taxes on the manufacturing facility, and insurance expense for the entire company.
Evaluate direct labor costs: These are typically controllable at the production supervisor level because the supervisor can manage the number of workers, their hours, and productivity levels.
Consider depreciation on factory equipment: Depreciation is a fixed cost and is not controllable by the production supervisor, as it is determined by accounting policies and the useful life of the equipment.
Assess property taxes and insurance expense: Both property taxes and insurance expense are fixed costs that are determined externally (by government or insurance companies) and are not controllable by the production supervisor.
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