Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Textbook Question
Chapter 23, Problem 3MC
Write out the formula for the total costs of carrying and ordering inventory, and then use the formula to derive the EOQ model.
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Write out the formula for the total costs of carrying and ordering inventory, and then use theformula to derive the EOQ model.
Which one of the following inventory management approaches determines the finished goods inventory level and then works backward until the raw material needs are determined?
A. Just-in-time
B. Extended EOQ
C. Materials requirements planning
D. Economic order quantity
Given the following calculate the cost of ending inventory and goods sold using fifo.
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Intermediate Financial Management (MindTap Course List)
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- Which of the following describes the economic order quantity (EOQ)? a. It is associated with a pull inventory system. b. It is the heart of a JIT purchasing system. c. It minimizes total ordering and carrying costs. d. It minimizes stock-out costs.arrow_forwardConsidering the following information, and applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forwardWhen inventory items are highly specialized, the best inventory costing method is ________. A. specific identification B. first-in, first-out C. last-in, first-out D. weighted averagearrow_forward
- 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.arrow_forwardWhy do companies adopt the LIFO method of inventory costing? Your discussion should include the effects on the income statement and balance sheet.arrow_forwardExplain why, in the traditional view of inventory, carrying costs increase as ordering costs decrease.arrow_forward
- Explain the difference between the flow of cost and the flow of goods as it relates to inventory.arrow_forwardThe following information is taken from a companys records. Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forwardgive me the weighted average cost per unit and ending inventory for FIFO, LIFO, and for Average-Cost.arrow_forward
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Inventory management; Author: The Finance Storyteller;https://www.youtube.com/watch?v=DZhHSR4_9B4;License: Standard Youtube License