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CA Inter Inventory Valuation — practice questions — page 3

Explore 66 free Inventory Valuation questions in CA Inter Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Inventory Valuation questions and exercises with answers

Showing questions 61–66 of 66.

Class B holds 30% of items. About what share of annual consumption value does it hold?Read the answer and worked solution →ABC class thresholds are what?Read the answer and worked solution →In ABC analysis, how is an item's annual usage value computed?Read the answer and worked solution →After computing usage values, items are arranged in which order?Read the answer and worked solution →An item needs 500 units a year at Rs 40 each. What is its annual usage value?Read the answer and worked solution →The ABC concept is based on whose law?Read the answer and worked solution →

Worked practice questions

Class B holds 30% of items. About what share of annual consumption value does it hold?

  1. 25%
  2. 5%
  3. 30%
  4. 70%
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Correct answer: A. 25%

The B class covers about thirty percent of items and about twenty-five percent of consumption value.

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ABC class thresholds are what?

  1. Set by each company
  2. Equal for all firms
  3. Fixed at 80:20
  4. Fixed by statute
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Correct answer: A. Set by each company

There is no fixed cut-off, and the proportions used vary with company objectives and criteria.

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In ABC analysis, how is an item's annual usage value computed?

  1. Annual need x unit cost
  2. Opening stock x price
  3. Lead time x unit cost
  4. Order size x order cost
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Correct answer: A. Annual need x unit cost

Multiplying annual requirement by cost per unit gives the yearly money value consumed.

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More Cost and Management Accounting topics

Cost SheetProcess CostingCost AccountingMarginal CostingEmployee CostActivity Based CostingBudgets and Budgetary ControlJob Costing