CVPM Inventory and Cost Control 2

Question 1

A veterinary practice's cost of goods sold (COGS) is $180,000 and net revenue is $450,000. What is the COGS percentage?

Accepted Answer

40%

Answer

35%

Answer

45%

Answer

50%

Question 2

Which inventory valuation method assumes that the most recently purchased items are sold first?

Accepted Answer

LIFO

Answer

FIFO

Answer

Weighted average

Answer

Specific identification

Question 3

What is the primary purpose of an ABC inventory analysis in a veterinary practice?

Accepted Answer

Categorize inventory by value to prioritize management effort

Answer

Alphabetize products for easy retrieval

Answer

Track expiration dates by product category

Answer

Assign reorder points based on supplier lead time

Question 4

A drug has a unit cost of $12 and the practice applies a standard markup of 100%. What is the dispensing fee if the final client charge is $30?

Accepted Answer

$6

Answer

$4

Answer

$8

Answer

$10

Question 5

Which term describes the minimum quantity of an item that should be on hand before a reorder is triggered?

Accepted Answer

Reorder point

Answer

Economic order quantity

Answer

Safety stock

Answer

Lead time demand

Question 6

Shrinkage in a veterinary pharmacy inventory most commonly results from which of the following?

Accepted Answer

Theft, breakage, expiration, and dispensing errors

Answer

High client demand for refills

Answer

Frequent supplier price increases

Answer

Excessive safety stock levels

Question 7

When a vendor offers a 2/10 net 30 payment term, what does '2/10' mean?

Accepted Answer

A 2% discount if paid within 10 days

Answer

A 2% penalty if paid after 10 days

Answer

A $2 rebate on orders over $10

Answer

Payment is due in 2 installments over 10 weeks