Loose Leaf for Foundations of Financial Management Format: Loose-leaf
17th Edition
ISBN: 9781260464924
Author: BLOCK
Publisher: Mcgraw Hill Publishers
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Textbook Question
Chapter 7, Problem 11DQ
If a firm uses a just-in-time inventory system, what effect is that likely to have on the number and location of suppliers? (LO7-5)
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Students have asked these similar questions
What is the main difference between a perpetual inventory system and a periodic inventory system? Which system is used more often by major companies?
a) Compare the periodic versus the perpetual system as a control device.
b) What sort of organisations are likely to use the periodic inventory system?What kind of organisations will prefer to use perpetual inventory system?c) If management overstated the valuation of inventory, would it affect profit for the year?
Explain in 175 words:
Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of goods sold and net income if prices are rising. What if the prices are declining?
Chapter 7 Solutions
Loose Leaf for Foundations of Financial Management Format: Loose-leaf
Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Why would a financial manager want to slow down...Ch. 7 - Use The Wall Street Journal or some other...Ch. 7 - Why are Treasury bills a favorite place for...Ch. 7 - Explain why the bad debt percentage or any other...Ch. 7 - What are three quantitative measures that can be...Ch. 7 - Prob. 8DQCh. 7 - What does the EOQ formula tell us? What assumption...Ch. 7 - Why might a firm keep a safety stock? What effect...
Ch. 7 - If a firm uses a just-in-time inventory system,...Ch. 7 - City Farm Insurance has collection centers across...Ch. 7 - Prob. 2PCh. 7 - Orbital Communications has operating plants in...Ch. 7 - Postal Express has outlets throughout the world....Ch. 7 - Thompson Wood Products has credit sales of...Ch. 7 - Oral Roberts Dental Supplies has annual sales of...Ch. 7 - Knight Roundtable Co. has annual credit sales of...Ch. 7 - Darla’s Cosmetics has annual credit sales of...Ch. 7 - Barney’s Antique Shop has annual credit sales of...Ch. 7 - Mervyn’s Fine Fashions has an average collection...Ch. 7 - Route Canal Shipping Company has the following...Ch. 7 - Nowlin Pipe & Steel has projected sales of 72,000...Ch. 7 - Fisk Corporation is trying to improve its...Ch. 7 - Prob. 14PCh. 7 - Diagnostic Supplies has expected sales of 84,100...Ch. 7 - Wisconsin Snowmobile Corp. is considering a switch...Ch. 7 - Johnson Electronics is considering extending trade...Ch. 7 - Henderson Office Supply is considering a more...Ch. 7 - Fast Turnstiles Co. is evaluating the extension of...Ch. 7 - Slow Roll Drum Co. is evaluating the extension of...Ch. 7 - Global Services is considering a promotional...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...Ch. 7 - Problems 22-25 are a series and should be...
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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 managersarrow_forwardWhich of the following is used to analyze the efficiency and effectiveness of inventory management? inventory turnover only days’ sales in inventory only both inventory turnover and days’ sales in inventory neither inventory turnover nor days’ sales in inventoryarrow_forwardIndicate by a (1), (2), or (0) whether each of the following events wouldprobably cause average annual inventory holdings to rise, fall, or be affectedin an indeterminate manner:a. Our suppliers change from delivering by train to air freight. __________arrow_forward
- 1. U.S. public companies using LIFO also report the amount that inventory wouldincrease (oroccasionally decrease) if the company had instead used FIFO. Â See file please.arrow_forwardWhat does a very high inventory turnover ratio signify? Please provide your own example to explain your point.arrow_forwardWhich inventory system would allow a business to determine inventory shrinkage (breakage, theft, etc.)? Group of answer choices LIFO Periodic Perpetual FIFOarrow_forward
- Which of the following methods of inventory control will be used in case of a business whose inventory consists of a relatively small number of unique, high-cost items? Select one: a. FIFO b. Specific identification c. Average d. LIFOarrow_forwardH7. For the same transactions, why does the weighted-average cost method provide different value for ending inventory and COGS depending on whether the periodic or perpetual inventory system is used?  Select one: a. Perpetual inventory calculates and assigns costs as items are sold, while periodic inventory calculates and assigns costs at the end of the period.  b. Perpetual inventory calculates and assigns costs at the end of the period, while periodic inventory calculates and assigns costs as items are sold.  c. Perpetual inventory counts all the purchases for the month first before calculating the average cost, while periodic calculates the average cost after every transaction.  d. Perpetual inventory and periodic inventory will not provide different values using Explain also wrong options and explain with detailsarrow_forwardThe hypothetical flow is one of the methods used to determine the cost of inventory and the cost of goods sold, and assuming that the company uses the perpetual inventory system, discuss this method in detail, supporting your answer with a practical example to determine the cost of goods sold and the cost of inventory and the reasons for the difference in results for each method (FIFO, LIFO?arrow_forward
- Explain how the inventory valuation method (LIFO or FIFO) chosen by a company affects the cost of goods sold and net income if prices are rising. What if the prices are declining?arrow_forwardThe management of Mastronardo Company is considering the effects of inventory-costing methods on its financial statements.Assuming that the price the company pays for inventory is increasing, which method will: a.  Provide the highest gross profit?  select a method                                        FIFOLIFOAverage-cost b.  Provide the highest ending inventory?  select a method                                        FIFOLIFOAverage-costarrow_forwardWhat effect does each method used have on the firm’s reportedprofits? On ending inventory levels?arrow_forward
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