Logistics Costing and Finance Flashcards
7 cards from real CLTD practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Logistics Costing and Finance flashcards as text
Which costing method allocates logistics costs based on the actual activities that consume resources rather than spreading them proportionally across all products?
Answer: Activity-based costing (ABC)
Activity-based costing (ABC) traces costs to specific activities (e.g., picking, loading, invoicing) and then to cost objects, giving a more accurate picture of true logistics expenses.
A logistics manager calculates that total fixed costs are $500,000, variable cost per unit is $10, and selling price per unit is $20. What is the break-even volume?
Answer: 50,000 units
Break-even volume = Fixed costs ÷ (Price – Variable cost) = $500,000 ÷ ($20 – $10) = 50,000 units.
Which of the following best describes a carrier's 'fuel surcharge'?
Answer: A variable accessorial charge that adjusts freight rates based on diesel fuel price indices
Fuel surcharges are accessorial charges that fluctuate with published fuel price indices (e.g., DOE diesel index), allowing carriers to recover fuel cost volatility.
Total landed cost includes which of the following elements?
Answer: Purchase price, freight, insurance, duties, taxes, and other import/export costs
Total landed cost captures all costs to bring a product to its destination, including purchase price, ocean/air freight, insurance, customs duties, taxes, and handling fees.
What is the primary purpose of a transportation management system (TMS) in logistics finance?
Answer: To optimize carrier selection and freight spend while providing visibility into transportation costs
A TMS optimizes load planning and carrier selection to minimize freight spend and provides cost reporting and analytics, directly supporting logistics financial management.
A 'cost-to-serve' analysis is primarily used to:
Answer: Determine the profitability of serving individual customers or channels by allocating all supply chain costs
Cost-to-serve analysis attributes all supply chain costs (transport, warehousing, order processing, returns) to specific customers or channels to reveal true profitability.
In logistics, which term describes the practice of billing customers for freight charges after verifying the carrier's invoice for accuracy?
Answer: Freight audit and payment
Freight audit and payment is the process of reviewing carrier invoices for errors, ensuring rates and charges match contracts, then authorizing payment—a key logistics cost control function.