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A). What are inventories? Why are they important to manufacturing companies?

A). What are inventories? Why are they important to manufacturing companies?

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 3BE: Variable costingsales exceed production The beginning inventory is 52,800 units. All of the units...
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QUESTION 5 A). What are inventories? Why are they important to manufacturing companies? B). What is the difference between FIFO and LIFO? C). Given the following data, calculate a level production plan, quarterly ending inventory, and average quarterly inventory. If inventory carrying costs are $6 per unit per quarter, what is the annual carrying cost? Opening and ending inventory are zero. Quarter 1 Quarter 2| Quarter 3 Quarter 4 Totals $ Forecast Demand 5000 7000 8500 9500 Production Ending Inventory Average Inventory Inventory Cost If the company always carries 100 units of safety stock, what is the annual cost of carrying it? D) Perform an ABC analysis on the following set of products. Annual Item Demand Unit Cost A211 800 $9 B390 100 $90 C003 450 $6 D100 400 $100 E707 85 $2,000 F660 250 $320 G473 500 $75 H921 100 $75
Transcribed Image Text:QUESTION 5 A). What are inventories? Why are they important to manufacturing companies? B). What is the difference between FIFO and LIFO? C). Given the following data, calculate a level production plan, quarterly ending inventory, and average quarterly inventory. If inventory carrying costs are $6 per unit per quarter, what is the annual carrying cost? Opening and ending inventory are zero. Quarter 1 Quarter 2| Quarter 3 Quarter 4 Totals $ Forecast Demand 5000 7000 8500 9500 Production Ending Inventory Average Inventory Inventory Cost If the company always carries 100 units of safety stock, what is the annual cost of carrying it? D) Perform an ABC analysis on the following set of products. Annual Item Demand Unit Cost A211 800 $9 B390 100 $90 C003 450 $6 D100 400 $100 E707 85 $2,000 F660 250 $320 G473 500 $75 H921 100 $75
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