S6-2 Determining inventory costing methods Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements 1. Which inventory costing method would best meet Ward's goal? 2. Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need?

S6-2 Determining inventory costing methods Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing method that averages cost changes. Requirements 1. Which inventory costing method would best meet Ward's goal? 2. Assume Ward wanted to expense out the newer purchases of goods instead. Which inventory costing method would best meet that need?

Name: ning Objective 2S6-2 Determining inventory costing methodsWard Hardwa
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Description: ning Objective 2S6-2 Determining inventory costing methodsWard Hardware does not expect costs to change dramatically and wants to use aninventory costing method that averages cost changes.Requirements1. Which inventory costing method would best meet

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What factors might impact on the management’s selection of an inventory cost flow assumption? In your answer you need to provide explanation on what factors could impact on a manager to choose FIFO, LIFO or the average cost method. In your answer you may want to refer to issues such as the impact of various cost flow assumptions on the income statement or the statement of financial position. List four factors in your answer
During periods when costs are rising and inventory quantities are stable, cost of goods sold will be: Multiple Choice Lower under average cost than LIFO. Higher under FIFO than average cost. Lower under LIFO than FIFO. Higher under FIFO than LIFO.
In determining inventory's lower of cost or net realizable value, NRV is defined as: O Selling Cost O replacement cost Osales price less selling costs Sales Price
During periods of increasing costs, the use of the FIF0 method of costing inventory will result in a greater amount of net income than would result from the use of the LIFO cost method. True False
Which of the following statements about the margin of safety is (are ) correct? a. producing units for inventory increases the margin of safety b. the higher the margin.of safety, the better O c. very high margins of safety create the need for more inventory d. all of these
Which of the following costs will not affect cost of goods sold? Multiple Choice Inventory inspection costs. Inventory preparation costs. Inventory-related selling costs. O Freight charges incurred to bring inventory to the warehouse.
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2. Shepherd Cycles does not expect prices to change dramatically and wants to use a method that averages price changes. B. Which inventory method would best meet Shepherd's goal? Enter answer here. C. What if Shepherd wanted to expense out the newer purchases of goods instead? Which inventory would best meet that need? Enter answer here.
Lower-of-Cost-or-Market Method On the basis of the following data, determine the value of the inventory at the lower-of-cost-or-market by applying lower-of-cost-or-market to each inventory item, as shown in Exhibit 10. Market Value per Unit Item Inventory Quantity Cost per Unit (Net Realizable Value) JFW1 150 $27 $31 SAW9 314 14 10 Feedback
What is the purpose of the lower of cost or net realizable value rule? What would happen if a company was to report their inventory at replacement cost?
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