Why is the net realizable value of scrap used to lower estimated overhead costs in setting a predetermined overhead rate in a job order costing situation in which scrap is expected on most jobs?
The net realizable value of scrap is used in this way because the amount received from the sale of scrap is considered to be a reduction of the total cost incurred in the production process. This process is similar to the treatment of sales values of assets purchased and then sold in a "basket" of goods. The estimated cost of scrap is used in setting overhead rates; therefore, when the scrap is sold the amount received should be a reduction of total overhead.
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Marketing logistics involves which of the following types of distribution flows?
A) outbound and inbound only B) outbound, inbound, and reverse C) outbound and reverse only D) inbound and reverse only E) outbound only
According to Porter, the first step in predicting the behaviors of competitors is ________
A) to determine if the companies are publicly held B) to determine the companies' industry assumptions C) to understand the companies' objectives D) to understand the companies' current strategies