Exam 15: Inventory and Overhead

A periodic inventory system requires a physical count of its inventory once a month.

Bill Company's total overhead for a recent year was $100,000. Department A occupies 18,500 sq. ft., Department B 12,000 sq. ft., and Department C 4,000 sq. ft. What is amount of overhead allocated to Department B? (Round to the nearest whole percent.)

In FIFO, the most recent cost is assigned to the inventory sold.

Inventory turnover at retail is equal to net sales divided by:

Calculate using retail method:

The specific identification method might be used by companies with high-cost items.

Joy Co. allocates overhead expenses to all departments on the basis of floor space (sq. ft.) occupied by each department. This year total overhead expenses were $22,000. Department A occupied 15,000 sq. ft., Department B 18,000 sq. ft., and Department C 9,000 sq. ft. The amount of overhead allocated to Department B is (round to the nearest dollar):

In the specific identification method, the total cost of ending inventory is equal to the number of units not sold times the actual cost per unit.

Calculate inventory turnover at cost (to nearest hundredth):

French Co. has a beginning inventory of $77,000 and an ending inventory of $80,000. Sales were $280,000. Assume French's markup rate on selling price is 40%. Based on the selling price, what is the inventory turnover at cost? Round to the nearest hundredth.

During inflation, LIFO produces the highest possible income for a company.

Under certain circumstances, ending inventory could be valued at less than cost.

Melissa's Dress Shop's inventory at cost on January 1 was $19,400. Its retail value was $36,000. During the year, additional net purchases at a cost of $42,600 were brought in. Its retail value was $64,000. The net sales for the year were $70,000. Melissa's inventory at cost by the retail method is:

A company can change from LIFO to FIFO without notifying the Internal Revenue Service.

Javon Corp. had a beginning inventory of 300 cans of paint on January 1 at a cost of $2,100. During the year, the following purchases were made: Assuming 310 cans were left in inventory, what is the cost of ending inventory under the LIFO method?

Molls Co. allocates overhead expenses to all departments on the basis of the floor space (sq. ft.) occupied by each department. The total overhead expenses for a recent year amounted to $80,000. Department A occupied 4,000 square feet, Department B 7,000 square feet, and Department C 9,000 square feet. What is the amount of the overhead allocated to Department C?

Calculate inventory turnover at cost (to nearest hundredth):

Moss Co. uses the FIFO method to calculate ending inventory. Assuming 300 units are not sold, the cost of goods sold is:

Calculate estimated cost of ending inventory using the gross profit method:

Overhead expenses are: