IMANET Exam CMA Topic 5 Question 97 Discussion

Actual exam question for IMANET's CMA exam

Question #: 97
Topic #: 5

[All CMA Questions]

The Stewart Co. uses the economic order quantity (EOQ) model for inventory management.A decrease in which one of the following variables would increase the EOQ?

AAnnual sales.

BCost per order.

CSafety stock level.

DCarrying costs.

Show Suggested Answer

Suggested Answer: D

A firm enjoys a tax benefit upon recognizing a loss on disposal because the loss reduces book income. The old equipments book value is historical cost ($220,000) minus accumulated depreciation ($208,000).

The tax benefit is the accrual-basis loss on the disposal times the effective tax rate.

by Alonzo at Sep 18, 2024, 02:19 PM

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