Which one of the following is a reason for the just-in-time inventory policy? Select one: O A. The manufacturer may want to ensure that production is uninterrupted. O B. It is possible that future supplies may become scarce. O C. The manufacturer wants to keep the investment in inventory to a minimum. O D. The prices of the materials are expected to rise shortly. Clear my choice

Which one of the following is a reason for the just-in-time inventory policy? Select one: O A. The manufacturer may want to ensure that production is uninterrupted. O B. It is possible that future supplies may become scarce. O C. The manufacturer wants to keep the investment in inventory to a minimum. O D. The prices of the materials are expected to rise shortly. Clear my choice

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 5MC: Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information...

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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 Costing When Inventory Quantities Are Small A number of companies have adopted a just-in-time procedure for acquiring inventory. These companies have arrangements with their suppliers that require the supplier to deliver inventory just as the company needs the goods. As a result, just-in-time companies keep very little inventory on hand. Required: Once a company has switched to the just-in-time procedure and has little inventory, should the inventory costing method (LIFO or FIFO) affect cost of goods sold?
Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information is in real-time. B. Inventory is automatically updated. C. It allows managers to make current decisions about purchases, stock, and sales. D. It is cost-prohibitive.
A JIT inventory management system maintains which of the following? a. Goods should be pushed through the system on a fixed schedule based on anticipated demand. b. Goods should be pulled through the system by present demand. c. Total inventory costs are minimized by balancing setup and carrying costs. d. Inventories are needed to avoid stock-out costs.
You own a clothing store and use a periodic inventory system. Research like companies in the clothing industry and answer the following questions. Which inventory system is most used in clothing stores, periodic or perpetual? Why can periodic inventory reporting be a better approach to use than perpetual inventory reporting for this type of industry? What are some of the advantages and disadvantages to the periodic inventory method? What other types of businesses may use the periodic inventory method rather than the perpetual method?
One reason for inventory is to prevent shutdowns. How does the JIT approach to inventory management deal with this potential problem?
When would using the FIFO inventory costing method produce higher inventory account balances than the LIFO method would? A. inflationary times B. deflationary times C. always D. never
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?
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.
State whether the following statements are true with reasons: Safety stock increases as demand increases To protect against stock outs, a large batch size is a need Economic order quantity is based on a balancing between inventory carrying cost and shortage costs. Lead time is the time interval elapsing between the placement of a replenishment order and the receipt of last installment of goods against the order.
“Managers should always buy inventory in quantities that result in the lowest purchase cost per unit.” Do you agree? Why?
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