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Inventory

First In First Out (FIFO) versus Last In First Out (LIFO)

An accounting intern for a local CPA firm was reviewing the financial settlements of a client in the eletronics industry. The intern noticed that the client used the FIFO method of determing ending inventory and cost of goods sold. When she asked a colleague why the firm used FIFO instead of LIFO, she was told that the client

EOQ Computation for Salesworthy Sprokets Company

The Salesworthy Sprokets company purchase a sprocket flange used in the manufacture of aircraft door hinges directly from the supplier. Salesworthy's hinge production line, which is operated at a constant rate, will require 1,000 flanges per month throughout the year (....12,000 per year). if the administrative cost of placing

Production & Inventory

For this case read the article below concerning connecting the factory floor to the intranet/internet. This seems to be an effective way to manage an organization's inventory. When it comes to inventory control how will putting its factory floor on-line benefit an organization? Factory Floors Go Online: Pioneering manuf

Under what circumstances would a company need to estimate its inventory?

1. Under what circumstances would a company need to estimate its inventory? What are the differences between using the gross profit method and retail inventory method for estimating inventory? Which method of estimation, gross profit or retail inventory, is best? Explain your answer. 2. What are the criteria for capitalizatio

Inventory costing system for the following businesses

Please pick the best inventory costing system for the following businesses. Answer ___Klein Co. a custom jewelry manufacturer ___Friday-Nite-Fuel, a company that makes a variety of energy drinks. ___Langley & Sons, PLLC, a small law firm specializing in criminal defense cases. ___Taggart, Industries; a manufacturing com

How did Mr. Mandoff keep his new investments at such a high rate of return and keep paying off investors and giving to charities? How was he able to do what he did financially for so long?

12. How does the FIFO method differ from the average costing method of process costing system? Provide an example of FIFO. 13. You own Widgets 'R Us and are preparing your year-end financial statements. a) What inventory system do you use and why? What are its advantages and disadvantages? b) What activities should yo

Axe Company's work-in-process inventory

The following debits (credits) appeared in Axe Company's work-in-process inventory account for the month of March 2009: March Description Amounts 1 Beginning Balance $2,000 31 Direct Materials $12,000 31 Direct Labor

Calculating the predetermined overhead application rate

The work-in-process inventory account of a manufacturing firm shows a balance of $3,000 at the end of the accounting period. The job cost sheets of two incomplete jobs show charges of $500 and $300 for materials, and charges of $400 and $600 for direct labor. From this information, it appears that the company is using a predeter

Obsolete Inventory: Armstrong Corporation

Obsolete Inventory Armstrong Corporation manufactured bicycles parts. The company currently has a $21,000 inventory of parts that have become obsolete due to changes in design specifications. The parts could be sold for $9,000, or modified for $12,000 and sold for $22,300. 1. Which of the data above are relevant to the dec

Audits and Physical Inventory Misstatement

During the taking of physical inventory, the controller intentionally withheld several inventory tags from the employees responsible for the physical count. After the auditor left the client's premises at the completion of the inventory observation, the controller recorded nonexistent inventory on the tags and thereby significan

Which inventory model is best suited for a small bakery?

Develop an inventory plan for a small German bakery. It sells different types of breads, rolls, pastries and cakes. What inventory model is best suited, is it ABC or EOQ. How to set-up an inventory plan, and what information is needed to do the ABS or EOQ calculations?

Cost of Goods in a Perpetual System

Comparing cost of goods sold in a perpetual system?FIFO, LIFO, and average-cost methods Assume that a JR Tire Store completed the following perpetual inventory transactions for a line of tires: Beginning inventory 16 tires @ $ 65 Purchase 10 tires @ $ 78 Sale 12 tires @

Inventory Methods: FIFO, LIFO, Average Cost

Express Lane, a regional convenience store chain, maintains milk inventory by the gallon. The first month's milk purchases and sales at its Freeport, FL, location follows: Nov 2 1 gallon @ $2.00 each 6 2 gallons @ $2.10 each 13 2 gallons @ $2.20 each 14 The store sold 4 gallons of milk to a custom

ACC 403 Module 2 SLP 2 Correction to sales and to inventory

One client had indicated that they were interested in purchasing $35,500 worth of products, so the bookkeeper recorded the transaction. However, the client has not actually committed to the purchase. The bookkeeper may have made a mistake when computing cost of goods sold. She included total production costs for 2012 and did

Sample informal memo to Mary Mahr; equivalent units

Mary Mahr has recently been promoted to production manager, and so she has just started to receive various managerial reports. One of the reports she has received is the production cost report that you prepared. It showed that her department had 1,000 equivalent units in ending inventory. Her department has had a history of not

Obsolete Inventory - Armstrong Corporation

Obsolete Inventory Armstrong Corporation manufactured bicycles parts. The company currently has a $21,000 inventory of parts that have become obsolete due to changes in design specifications. The parts could be sold for $9,000, or modified for $12,000 and sold for $22,300. 1. Which of the data above are relevant to the dec

Inventory Costing and Valuation

The acquisition cost of inventory remaining at the end of a period is measured using LIFO, FIFO, or average cost. a.) Rank cost of goods sold, gross profit, and ending inventory from highest to lowest under the three cost-flow assumptions when input prices are rising. b.) How should differences between acquisition cost and

What is inventory?

Describe inventory and provide some examples of inventory you have seen in your experience? How does inventory affect a firm's financial performance? Provide and example of service inventory?

Perpetual vs periodic inventory systems

Why are perpetual inventory systems so much more popular today than back in the early 1960s and earlier? Why would a company employing a perpetual inventory system still take a physical inventory periodically? What are the journal entries a merchandising organization would use to record the purchase and subsequent sale of mer