After computing usage values, items are arranged in which order?
AAscending usage value
BDescending usage value
CAlphabetical order
DDate of purchase
Answer & Solution
Correct answer: B. Descending usage value
Ranking from the highest usage value down lets the big-value items cluster at the top for class A.
Keep practising Inventory Valuation
Browse all Inventory Valuation questions for CA Inter, or explore more Cost and Management Accounting topics.
Related questions
The ABC concept is based on whose law?An item needs 500 units a year at Rs 40 each. What is its annual usage value?In ABC analysis, how is an item's annual usage value computed?ABC class thresholds are what?Class B holds 30% of items. About what share of annual consumption value does it hold?Half of all items fall in class C. Roughly what share of consumption value do they hold?ABC analysis resembles which principle, where few items carry most value?Which class gets the simplest controls and minimal records?