In one modification of the Pigskin problem, the maxi-mum storage constraint and the holding cost are based on the average inventory (not ending inventory) for agiven month, where the average inventory is defined as the sum of beginning inventory and ending inven-tory, divided by 2, and beginning inventory is before production or demand. Modify the Pigskin model withthis new assumption, and use Solver to find the optimal solution. How does this change the optimal productionschedule? How does it change the optimal total cost?

In one modification of the Pigskin problem, the maxi-mum storage constraint and the holding cost are based on the average inventory (not ending inventory) for agiven month, where the average inventory is defined as the sum of beginning inventory and ending inven-tory, divided by 2, and beginning inventory is before production or demand. Modify the Pigskin model withthis new assumption, and use Solver to find the optimal solution. How does this change the optimal productionschedule? How does it change the optimal total cost?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 31BEB: Inventory Valuation under Variable Costing Refer to the data for Pelham Company on the previous...

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Which of the following is an advantage of the periodic inventory system? A. frequent physical inventory counts B. cost prohibitive C. time consuming D. real-time information for managers
Inventory Valuation under Variable Costing Refer to the data for Pelham Company on the previous page. Required: 1. How many units are in ending inventory? 2. Using variable costing, calculate the per-unit product cost. 3. What is the value of ending inventory under variable costing? Use the following information for Brief Exercises 3-30 and 3-31: During the most recent year, Pelham Company had the following data associated with the product it makes:
In order to get the lowest profits possible in periods of rising inventory costs, the company should use which of the following inventory costing methods? Group of answer choices Average cost Specific identification FIFO LIFO
Zimt AG uses the FIFO method, and Nutmeg Inc. uses the LIFO method. Compared tothe cost of replacing the inventory, during periods of rising prices the ending inventorybalance reported by:A. Zimt is too high.B. Nutmeg is too low.C. Nutmeg is too high.
For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount when inventory costs are rising versus falling. The first answer is provided as an example.
Identify that if prices are rising, which inventory cost flow method will produce the highest amount of ending inventory? A. Weighted average B. LIFO C. FIFO S. LIFO, FIFO, and weighted average will all produce the same amount of cost of goods sold.
Which of the following statements is correct? Group of answer choices A)The choice of an inventory costing method is dependent upon the actual physical flow of the inventory. B)LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet. C)FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet. D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.
Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule is true? a.The LCNRV rule is an application of the cost principle. b.When the net realizable value of inventory drops below the cost of inventory, an adjustment is made to decrease inventory to its net realizable value and decrease income. c.If a company uses the LCNRV rule, there is no need to use a cost flow assumption such as FIFO, or weighted average cost. d.When the net realizable value of inventory is above the cost of inventory, an adjustment is made to increase inventory to its net realizable value and increase income.
For all short exercises, assume the perpetual inventory system is used unless stated otherwise. Determining inventory costing methods Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements Which inventory costing method would best meet Ward’s goal? Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need?
In times of decreasing prices, LIFO will result in ____ costs of goods sold and _____ ending inventory than FIFO. Group of answer choices: Lower, Lower Lower, Higher Higher, Lower Higher, Higher
Under variable costing, which of the following costs are assigned to inventory? Variable Selling & Administrative Costs variable Factory Overhead Costs (A) Yes No b)No yes c)Yes Yes d) No No 8.Which of the following would appear on both the budgeted income statement and on the schedule of expected cash disbursements for operating expenses? (A) Depreciation expense (B) Rent expense (C) Sales commission expense (D) Both B and C 9.Which of the following is not an underlying assumption of the cost-volume-profit graph? (A) Expenses are categorized into fixed and variable (B) Revenues and expenses are linear over the relevant range (C) Efficiency and productivity will be unchanged (D) Sales mix will not be…
If the ending inventory of a firm is overstated by $49,000, by how much and in what direction (overstated or understated) will the firm's operating income be misstated? (Hint: Use the cost of goods sold model, enter hypothetically "correct" data, and then reflect the effects of the ending inventory error and determine the effect on cost of goods sold.) operating income ? By ?