Inventory Valuation
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John Roberts Inc. uses variable costing methods for its internal reporting. Under the variable costing procedures
a. an increase in inventory decreases marginal income.
b. fixed costs are treated as period costs.
c. no overhead costs are charged to the product.
d. inventory values tend to be overstated
Janice Caldwell Company values its inventory by using the retail method (LIFO basis, stable prices). The following information is available for the year 2005.
Beginning inventory Cost Retail
Purchases $78,000 $140,000
Freight-in 368,000 628,000
Markups (net) 16,000 -
Markdowns (net) - 18,000
Sales - 6,000
610,000
At what amount would Janice Caldwell Company report its ending inventory?
a. $95,700
b. $96,000
c. $100,000
d. $102,000
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Solution Summary
The expert examines inventory valuation methods for costing.
Education
- MBA (IP), International Center for Internationa Business
- BBA, University of Rajasthan
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