Widgets Company, a company that sells only one type of widget, had a September of 11 units, at $200/unit. Throughout the first two weeks, they purchased additional inventory in the amount of 5 widgets at $209/widget and 9 widgets at $220 each. During the third week, they sold 12 widgets at $420/each. If the replacement cost decreased to $205 in October, and the uring FIFO, what is the adjustment that should be made to the inventory account?

Widgets Company, a company that sells only one type of widget, had a September of 11 units, at $200/unit. Throughout the first two weeks, they purchased additional inventory in the amount of 5 widgets at $209/widget and 9 widgets at $220 each. During the third week, they sold 12 widgets at $420/each. If the replacement cost decreased to $205 in October, and the uring FIFO, what is the adjustment that should be made to the inventory account?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 2CMA: Chassen Company, a cracker and cookie manufacturer, has the following unit costs for the month of...

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Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the annual ordering cost. 2. Compute the annual carrying cost. 3. Compute the cost of Ottiss current inventory policy. Is this the minimum cost? Why or why not?
Denali Company manufactures household products such as windows, light fixtures, ladders, and work tables. During the year it produced 10,000 Model 10X windows but only sold 5,000 units at $40 each. The remaining units cannot be sold through normal channels. Cost for inventory purposes on December 31 included the following data on the unsold units: Denali can sell the 5,000 windows at a liquidation price of $20.00 per window, but it will incur a packaging and shipping charge of $7.50 per window. Required: Identify the relevant costs and revenues for the liquidation sale alternative. Is Denali better off accepting the liquidation price rather than doing nothing? Assume that Model 10X can be reprocessed to another size window, Model 20X, which will require the same amount of labor and overhead as was required to initially produce, but sells for only $33. Determine the most profitable course of action—liquidate or reprocess.
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Camino Jet Engines, Inc. Is a supplier of jet engine parts. The company began the most reecent Fiscal Year with inventory of 75 units. The units cost 8,500 each. The company uses a perpetual inventory system to account for inventory. The following transactions occurred during the year. a. Purchases 50 additional units at a cost of $8,900 per unit. Terms of the purchases were 2/10, n/30, and payments was made within 10-days discount period. The company uses the gross method to record purchase discounts. The merchandise was purchased f.o.b shipping point. The company paid freight charges of $500 per unit b. 6 of the units purchased during the year were returned to the manufacturer for credit. The company were also given credit for the freight charges of $500 per unit it had paid on the original purchase. The units were defective and were returned two days after they were received c. Sales for the year totaled…
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