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A manufacturer has discovered that some of the stock in its storeroom is obsolete and now wishes to take the appropriate action. Should the manufacturer write the stock off?

Options:

No, the best approach would be to leave the stock where it is

Yes, as it has no value it must be written off

Yes, this will increase the sales for the period

No, it should be included with the closing stock

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Question 2

Nuclear Energy Group Limited (NEG) has a number of investment options currently under appraisal. As these are all long-term investments (more than 30 years), NEG is adopting a total cost of ownership approach. It has gathered data on all associated costs over the life of the investment. Which of the following will be regarded as end-of-life costs?

Options:

Insurance costs

Servicing costs

Installation costs

Decommissioning costs

Question 3

Which of the following is the correct statement about total ordering cost?

Options:

Rise as the average stock level rises

Equal the number of orders placed times the cost of placing an order

Rise as the order quantity rises

Fall with the per period usage rate

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