When inventory costs rise and inventory quantities are not decreasing, what does the LIFO produces?

Q: What effect does each method used have on the firm’s reportedprofits? On ending inventory levels?

A: Answer: The following is the effect that each method of inventory on firms reported profits:…

Q: How do you measure gross margin return on inventory(GMROI)?

A: GMROI is a measure of inventory profitability where, it measures how much profit does the sales…

Q: Which of the following is not an inventory method/cost flow assumption? O a. First-in, first-out O…

A: 5 methods for inventory cost are below: The retail inventory method. The specific identification…

Q: What Is The Lean Perspective on Inventory?

A: Lean perspective on inventory is an approach which helps the organization to reduce the wastage an…

Q: What is inventory turnover Ratio? Explain its significance.

A: Explain the meaning of inventory turnover ratio and its significance:Inventory turnover ratio:…

Q: Net sales minus cost of good sold is equal to cost of ending inventory.   T/F

A: The ending inventory is the amount of inventory left with business at year end.

Q: In what ways would a reduction in inventory help the company

A: Inventory refers to all the items, goods, merchandise, and materials held by a business for selling…

Q: 2 Calculate ending inventory using the lower of cost and net realizable value.

A: The Inventory is  recorded at cost or NRV in the financial position so that inventory is valued…

Q: "Market" is defined in the "Lower-of-cost-or-market" rule required to account for FIFO inventory as:…

A: Inventory- Inventory refers to the items which business kept on hand in order to make the money, it…

Q: What is a LIFO inventory pool? How is the cost of ending inventory determined when pools are used?

A:

Q: How do you calculate inventory turnover ratio

A: Inventory turnover ratio indicates how fast a firm converting its inventory into the cost of goods…

Q: In calculating inventory turnover, why is cost of goods sold used as the numerator? As the inventory…

A: Inventory turnover ratio:Inventory turnover ratio is used to determine the number of times inventory…

Q: How does Just-In-Time (JIT) system help minimize the inventory investment? Explain.

A: Just-In-Time (JIT) is used for that inventory which is owned by business at reduced amount on…

Q: The number of units that a company should add to inventory with each order to minimize the total…

A:

Q: What does the inventory turnover ratio mean?

A: Inventory turnover ratio gives the days required for the company from the date of its purchase to…

Q: ith inflation, what are the implications of using LIFO and FIFO inventory methods? How do they…

A: FIFO: First in, first out (FIFO) is a method of asset management and valuation in which assets…

Q: Explain inventory turnover? Can this be too high ever

A: Inventory turnover ratio means the time old inventory is replaced with new inventory with in a year.…

Q: Can an inventory turnover be too high?

A: The inventory turnover ratio is nothing but the number of times an entity is replacing the goods. It…

Q: What does a very high inventory turnover ratio signify? Please provide your own example to explain…

A: Inventory turnover ratio is one of the efficiency ratio, which says and calculates how many times…

Q: factors affect inventory turnover ratio

A: The inventory turnover ratio is a financial ratio. It is the rate at which a company is managing its…

Q: Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of…

A: Inventory management refers to the valuation of inventory in three ways FIFO, LIFO and weighted…

Q: Explain an example how to calculate inventory turnover ratio.

A: Inventory turnover ratio : Inventory turnover is used to find how many times a company sold its…

Q: How do you use FIFO and LIFO to calculate the cost of inventory?

A: Lets understand the meaning of LIFO and FIFO method. In First In First Out (FIFO) method company…

Q: Explain the lower of cost or market rule for inventory valuation and explain why it is GAAP.

A: Lower of cost or market value for inventory valuation is just a mixture of many accounting…

Q: If inventory is being valued at cost and the price level is steadily rising, which of the three…

A: Introduction:

Q: During periods of rising costs, which inventory costing method produces the highest gross profit?

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

Q: Which of the following is used to analyze the efficiency and effectiveness of inventory management?…

A: Formulas:  Inventory turnover ratio = Cost of goods sold / Average inventory Days' sales in…

Q: What are some inventory ordering costs? As defined here, are thesecosts fixed or variable?

A: Inventory ordering cost can be define as the cost that is incurred by the firm during order…

Q: ntory decline in value?

A: All of the commodities, goods, merchandise, and materials retained by a firm for the purpose of…

Q: What does it mean that product costs fl ow through inventory on their way to the income statement?

A: Product costs: The costs incurred to acquire the merchandise, ship the stock, prepare the…

Q: Compared to using the weighted average cost method to account for inventory, during aperiod in which…

A: First-in-First-Out (FIFO):   In First-in-First-Out method, the costs of the initially purchased…

Q: Explain the term inventory turnover ratio.

A: Definition:   Ratio analysis: One of the techniques of financial statement analysis is ratio…

Q: Is it possible to have a high inventory turnover and a high number of days’ sales in inventory? Why?

A: Inventory Turnover is calculated to measure the level of inventory hold by the firm compared to…

Q: Stanley's inventory turnover ratio is?

A: The ratio is used to evaluate the firm's financial situation and helps management in making…

Q: What is the purpose of the lower of cost or net realizable value rule?

A: lower of cost or net realizable value rule(LCNRV method):Inventory should be valued at the lower of…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.