COST ACCOUNTING
INVENTORY AND PRODUCTION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The demand for item is dependent upon the demand for some other item
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Used when intervory builds up over a period of time after an order is placed
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The costs of placing an order and receiving goods
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Detailed explanation-1: -Generally, Dependent Demand Item refers to the item whose demand is required by the one-by-one calculation base on the independent demand items such as products and service parts, and includes assemblies, subassemblies, processed parts, purchased parts, and raw materials.
Detailed explanation-2: -Demand is independent if it is unrelated to demand for any other product or service. Demand is dependent if it is derived from the demand for another product or service. Independent demand needs to be forecast; however, requirements for dependent demand are calculated from the independent items.
Detailed explanation-3: -Dependent demand, on the other hand, is demand for component parts or subassemblies. For example, this would be the microchips in the computer, the wheels on the bicycle, or the cheese on the pizza.
Detailed explanation-4: -Independent demand is the demand for a finished good, such as a car, while dependent demand is the demand for a component part of a finished good, such as the tires on a car.