QUESTION 5A). What are inventories? Why are they important to manufacturingcompanies?B). What is the difference between FIFO and LIFO?C). Given the following data, calculate a level production plan,quarterly ending inventory, and average quarterly inventory. Ifinventory carrying costs are $6 per unit per quarter, what is theannual carrying cost? Opening and ending inventory are zero.Quarter 1 Quarter 2| Quarter 3 Quarter 4 Totals$Forecast Demand5000700085009500ProductionEnding InventoryAverage InventoryInventory CostIf the company always carries 100 units of safety stock, what is the annualcost of carrying it?D) Perform an ABC analysis on the following set of products.AnnualItemDemandUnit CostA211800$9B390100$90C003450$6D100400$100E70785$2,000F660250$320G473500$75H921100$75

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Answered: A). What are inventories? Why are they…

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A). What are inventories? Why are they important to manufacturing companies?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 4CE: Refer to Cornerstone Exercise 18.3. Required: 1. Calculate the cost of each unit using variable...

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