Parker Corp.has developed the following information on product costs and inventories for a three-month period: Manufacturing costs $3,000 $5,000 $4,500
Based on managerial judgment, the best predictor of manufacturing costs is
A) beginning inventory.
B) units manufactured.
C) ending inventory.
D) units available.

Question

Parker Corp.has developed the following information on product costs and inventories for a three-month period:  Manufacturing costs $3,000 $5,000 $4,500
Based on managerial judgment, the best predictor of manufacturing costs is
A) beginning inventory. 
B) units manufactured. 
C) ending inventory. 
D) units available.

Quizplus · Accepted Answer

Units manufactured are most likely the best predictor of manufacturing costs as it directly relates to the production process and the costs associated with it. Beginning and ending inventory may not accurately reflect the actual costs incurred during the period, while units available may include units from the previous period and therefore not be a good predictor of current manufacturing costs.