Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 10, Problem 17E
a.
To determine
Whether the new inventory system that is available to Person L is approximate or pure just in the time system.
b.
To determine
Calculate the amount of inventory holding cost that would be eliminated by Person L.
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QUESTION 1
a) The annual demand for Praise Limited’s inventory is 10,500 units. The item costs GH¢400 a unit to purchase. The holding cost for one unit for one year is 12% of the unit cost and ordering costs are GH¢450 per order. The supplier offers a 2% discount for orders of 700 units or more and a discount of 3% for orders of 950 units or more.
Required:
Determine the cost minimising order size of the company.
b) Kwame after his National Service and with no hope of securing a job in the formal sector has decided to run a taxi service. The following forecast has been made for the operation of a service between Abisim and Sunyani.
i) Revenue totaling GH¢300 a week for 52 weeks in a year. This is net of fuel and other variable costs.
ii) Tyres; four pieces for a year at GH¢120 per unit.
iii) Maintenance and servicing; GH¢120 per month.
iv) Salaries GH¢3,000 per year
v) Insurance GH¢350 per year
The net cash flow will increase at 5% per annum for the next five years due to inflation.…
2. [EXCEL] Operating cycle: Lilly’s Bakery distributes its products to more than 75 restaurants and delis. The company's average collection period is 27 days, and it keeps its inventory for an average of four days. What is Lilly's operating cycle? Please use excel
Brief Exercise 2-3 Cost of Goods Sold Refer to Brief Exercise 2-2. Bob’s Bistro expects to produce 50,000 units and sell 50,500 units. Beginning inventory of fin-ished goods is $13,000, and ending inventory of finished goods is expected to be $10,000. Required: 1. Prepare a statement of cost of goods sold in good form. 2. What if the beginning inventory of finished goods increased by $4,000? What would be the effect on the cost of goods sold? Brief Exercise 2-4 Income Statement Refer to Brief Exercises 2-2 and 2-3. Next year, Bob’s Bistro expects to produce 50,000 units and sell 50,500 units at a price of $20.00 each. Beginning inventory of finished goods is $13,000, and ending inventory of finished goods is expected to be $10,000. Total selling expense is projected at $130,000, and total administrative expense is projected at $154,000.
Chapter 10 Solutions
Survey Of Accounting
Ch. 10 - 1. What are some differences between financial and...Ch. 10 - 2. What does the value-added principle mean as it...Ch. 10 - 4. How does product costing used in financial...Ch. 10 - 5. What does the statement costs can be assets or...Ch. 10 - 6. Why are the salaries of production workers...Ch. 10 - 7. How do product costs affect the financial...Ch. 10 - 8. What is an indirect cost? Provide examples of...Ch. 10 - 9. How does a product cost differ from a selling,...Ch. 10 - 10. Why is cost classification important to...Ch. 10 - 11. What is cost allocation? Give an example of a...
Ch. 10 - 13. What are some of the common ethical conflicts...Ch. 10 - 14. What costs should be considered in determining...Ch. 10 - 15. What is a just-in-time (JIT) inventory system?...Ch. 10 - Prob. 14QCh. 10 - Prob. 15QCh. 10 - Prob. 16QCh. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - Prob. 19QCh. 10 - Prob. 1ECh. 10 - Exercise 1-2A Identifying product versus selling,...Ch. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Exercise 1-6A Identifying product versus SGA costs...Ch. 10 - LO 1-3 Exercise 1-7A Recording product versus SGA...Ch. 10 - Prob. 8ECh. 10 - LO 1-4 Exercise 1-9A Upstream, midstream, and...Ch. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Cost of goods manufactured and sold The following...Ch. 10 - Prob. 15ECh. 10 - Exercise 1-14A Using JIT to minimize waste and...Ch. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Prob. 19ECh. 10 - Prob. 20ECh. 10 - Problem 1-19A Characteristics of financial versus...Ch. 10 - Prob. 22PCh. 10 - Problem 1-21A Effect of product versus period...Ch. 10 - Problem 1-22A Product versus SGA costs The...Ch. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 1ATCCh. 10 - Prob. 2ATCCh. 10 - Prob. 3ATCCh. 10 - Prob. 4ATCCh. 10 - Ethical Dilemma Product cost versus selling and...
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- Exercise 4-54 Operating Cycle and Current Receivables a. Dither and Sly are attorneys-at-law who specialize in federal income tax law. The): complete their typical case in 6 months or less and collect from the typical client within 1 additional month. b. Johnstons Market specializes in fresh meat and fish. All merchandise must be sold within one week of purchase. Almost all sales are for cash and any receivables are generally paid by the end of the following month. c. Mortondos is a womens clothing store specializing in high-style merchandise. Merchandise spends an average of 7 months on the rack following purchase. Most sales are on credit and the typical customer pays within 1 month of sale. d. Trees Inc. grows Christmas trees and sells them to various Christmas tree lots. Most sales are for cash. It takes 6 years to grow a tree. Required: For each of the businesses described above, indicate the length of the operating cycle.arrow_forwardQuestion 1Hobart Sign Company began the month of June with an inventory of 50 signs that cost a total of$1,500. Hobart purchased and sold merchandise on account as follows:June 3 Purchase ……………………………….. 60 signs @ $35 eachJune 8 Sale …………………………………….... 100 signs @ $60 eachJune 18 Purchase ……………………………….. 90 signs @ $40 eachJune 28 Sale …………………………………….... 70 signs @ $70 eachHobart uses the FIFO cost method. Cash payments, on account, totaled $5,000. Operating expenseswere $2,700; Hobart paid two-thirds in cash and accrued the rest as Accounts Payable.i) Prepare a perpetual inventory record, at FIFO cost, for this merchandise.ii) Make journal entries to record the company’s transactionsiii)Prepare an income statement for Hobart Sign Company for the month ended June 30arrow_forwardQUESTION TWOa) The Chisokone Company located in Chimwemwe manufactures typewriters called AK4 model Z. The company has an average total inventory of K15, 000,000 and places 12,000 orders every year. Order details are as follows:Purchase department expenses……………………………..K400, 000Stores warehouse personnel salary……………………......K400, 000Obsolescence, spoilage, etc…………………………………K120, 000Floor space charge related to stores activities…………….K260, 000Cost of collecting materials…………………………………..K60, 000Cost of receiving materials…………………………………...K70, 000Cost of Inspection……………………………………………..K100, 000Cost of material handling for warehousing activities………K300, 000Cost of bill payment……………………………………………K170, 000Interest…………………………………………………………..11.5%Insurance charges………………………………………………1.9%The company wants to buy a certain component, whose cost is K24 each and the annual requirement is 34,560 units. Calculate the following:i. The cost of placing an order.ii. The cost of carrying inventory as a percentage…arrow_forward
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