Corporate Finance
12th Edition
ISBN: 9781259918940
Author: Ross, Stephen A.
Publisher: Mcgraw-hill Education,
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Chapter 26, Problem 4CQ
Cost of Current Assets Grohl Manufacturing, Inc., has recently installed a just-in-time (JIT) inventory system. Describe the effect this is likely to have on the company's carrying com, shortage costs, and operating cycle.
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Which of the following is an advantage of the periodic inventory system?A. frequent physical inventory countsB. cost prohibitiveC. time consumingD. real-time information for managers
Concept Integration. Your appliance manufacturingcompany recently implemented a just-in-time inventory system (see Chapter 9) for all parts used in themanufacturing process. How might you expect thismove to affect the company’s inventory turnover rate,current ratio, and quick ratio?
Inventory carrying costs:
O include the costs of generating memos, fax transmissions, etc. associated with placing an order with a supplier.
O generally increase in proportion to the average amount of inventory held.
are fixed regardless of the average size of the inventory.
are equal to the sum of total inventory costs and total ordering costs.
are at maximum when a firm's order is equal to optimal quantity.
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- Calculate the projected inventory turnover, days sales outstanding (DSO), fixed assets turnover, and total assets turnover. How does Computron’s utilization of assets stack up against that of other firms in its industry?arrow_forwardDescribe costing inventory using weighted average. Address the different treatment, if any, that must be given for periodic and perpetual inventory updating.arrow_forwardInventory Costing: LIFO Refer to the information for Filimonov Inc. and assume that the company uses a perpetual inventory system. Required: Calculate the cost of goods sold and the cost of ending inventory using the LIFO inventory costing method.arrow_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_forwardUse the first-in, first-out method (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for B75 Company, considering the following transactions.arrow_forwardUse the last-in, first-out method (LIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for B75 Company, considering the following transactions.arrow_forward
- Use the first-in, first-out (FIFO) cost allocation method, with perpetual inventory updating, to calculate (a) sales revenue, (b) cost of goods sold, and c) gross margin for A75 Company, considering the following transactions.arrow_forwardDescribe costing inventory using last-in, first-out. Address the different treatment, if any, that must be given for periodic and perpetual inventory updating.arrow_forwardWhen using a perpetual inventory system and the weighted-average inventory costing method, when does the business compute a new weighted-average cost per unit?arrow_forward
- Which of the following is an advantage of the periodic inventory system? Group of answer choices frequent physical inventory counts cost prohibitive time consuming real-time information for managersarrow_forwardGive examples of costs included in annual carrying costs of inventory when using the EOQ decision model.arrow_forwardCost accounting systems used by manufacturing companies are based on the: A. LIFO inventory system. B. Perpetual inventory system. C. Finished goods inventories. D. Weighted average inventories. E. Periodic inventory system. Reset Selectionarrow_forward
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Chapter 6 Merchandise Inventory; Author: Vicki Stewart;https://www.youtube.com/watch?v=DnrcQLD2yKU;License: Standard YouTube License, CC-BY
Accounting for Merchandising Operations Recording Purchases of Merchandise; Author: Socrat Ghadban;https://www.youtube.com/watch?v=iQp5UoYpG20;License: Standard Youtube License