rsm219 2012 term test2

Merchandise is generally stored on racks above required for handling and stocking. In addition, sales are processed through

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

Cost of inventory is determined using the average method; inventory is stated at the lower of cost or market. +pB13

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?

purposes. Its beginning inventory for the current year was $8,000,000. Its ending inventory for the current year

3 types of goods that classify as inventory are goods awaiting sale (the merchandise of a trading concern and the finished goods of a manufacturer), goods in the course of production (work in process), and goods to be consumed directly or indirectly in production (raw materials and supplies).

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.

Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost

I have taken it upon myself to test two inventory management systems and have found a system that will yield the least cost to Parts Emporium Inc. The two systems I have tested are the Continuous Inventory System and the Periodic Inventory System. Using data that I have gathered from the products DB032 and the EG151, I have compiled calculations and have concluded a continuous inventory system would be best for our corporation. Attached you will find said calculations; I would like to take this moment and present the continuous inventory system and recognize all of the relevant costs. The following is an explanation of each calculation under the continuous inventory system:

Your goods in transit includes accounts receivable, computers, equipment, exhibitions, goods in transit and valuable papers and records. Paper goods are all susceptible to damage by fire, water damage, collision or overturn.

The annual cost of holding a unit of inventory is 24% of the item cost ($300).

The Inventory Control module is designed to allow you a fast and easy way to keep track of your inventory. You are able to track what you have purchased and what prices you are paying from various suppliers for any length of time. In-house batch production items can be processed along with multiple location transfers. Inventory is first categorized into major classifications that you choose such as meat, dairy and produce. Inventory can be kept on a perpetual basis by entering your purchases for those items and taking a physical count monthly or as frequently as desired to get your actual usage on each item. Inventory may also be kept on a periodic basis which does not require entering all your purchases. The periodic method allows for entry of a physical count and last cost at any point in time and will automatically extend the inventory for you. Both methods provide inventory count sheets by specific storage location and fast inventory count entry methods. The two methods can also be combined to allow detailed control of high cost items and less detailed control of less

(1) Goods are deemed to be in course of transit from the time when they are delivered to a carrier or other bailee for the purpose of transmission to the buyer, until the buyer or his agent in that behalf takes delivery of them from such carrier or other bailee.

According to the definition of the transit period in s. 45(1) SOGA 1979, the goods were in transitu when the transactions between the involved parties took place.