Accountant 492

4. For the most recent year, what is the amount of cost of goods sold in the

To be successful in today’s business environment, an organization must be able to perform certain fundamentals accurately and efficiently. One of these elements is having an effective and efficient Inventory System Management (ISM). ISM enables one to have the knowledge of where his or her inventory is at every step of the way. This allows one to better interact with consumer and make sales. Choosing the right ISM can lead and pave the ground work for future business success and profitability.

inventory using the cost method and did not change the method used during the current

4. What inventory method is used to value inventories? Does this method reflect current cost at year-end?

330-10-30330-10-30-1 The primary basis of accounting for inventories is cost, which has been defined generally as the price paid or consideration given to acquire an asset. As applied to inventories, cost means in principle the sum of the applicable expenditures and charges directly or indirectly incurred in bringing an article to its existing condition and location. It is understood to mean acquisition and production cost, and its determination involves many considerations. 330-10-30330-10-30-2 Although principles for the determination of inventory costs may be easily stated, their application, particularly to such inventory items as work in process and finished goods, is difficult because of the variety of considerations in the allocation of costs and charges.

Your sister owns a small clothing store. During a conversation at a family dinner, she mentions her

inventory or product samples (see instructions) . . . . . . . . . . . . . . . .

The staff is responsible for handling the customer’s cash and solved products are tallied and while it is in the log book. With no real inventory system they are also double checking if what the solved products are.

The determination of these values requires you to add columns to the Inventory Analysis worksheet. Mr. Milligan asks you to use the worksheet provided. As Mr. Milligan will use the Inventory Analysis worksheet during a presentation, he wants the worksheet to have a professional appearance. To enhance the worksheet’s appearance, you include an appropriate header and format to the worksheet, column, and row labels. The header should display the name of the business, the name of the worksheet, and the current date. As you construct the worksheet, you use the currency format for all columns containing dollar values. Also, for any column that contains a percentage, you

Tasks:  What should Alison do? o Develop plans to improve the inventory management o Develop time-based supply strategies to bring competitive advantages to the organization  Identify the functions and forms of inventory  What are alternatives for inventory management? o ABC classification o Supplier-managed inventories (SMI) o Just-on-time or Just-in-time (JIT) o Enhance the forecasting system (factor correlated with inventory variation)  Provide training programs for current and new hiring employees 1

After closing the store, the staff in charge of the inventory of raw materials inventory and registration will calculate the amount of goods left to prepare if any more ordering of raw materials is needed. This data is also used for costing needed to operate the day.

goods. They can also be in process between different locations. Holding of inventories can cost a

❖ Historical inventory turnover rates should be analyzed so to identify the appropriate range of supplies to be on hand in each category.

SF does not want the product overproduced, provide timely reporting of product sales in order to avoid this problem. For this reason, the company's inventory becomes a serious problem.

The finance department will also monitor levels of lost and outdated inventory to make sure that the levels don’t become too high. They need to write off this inventory but has to make sure that it isn’t excessive. Finance people also monitor the counts or physical inventories in order to reconcile what is actually on hand with what has been recorded in the company’s records. The finance department does not manage the inventory personally but it does have to make sure that the people