Exam 18: Inventory and Overhead

Inventory turnover at cost is net sales divided by average inventory at retail.

Mac's Hardware's gross profit on sales is 40%. At the beginning of January, cost of inventory was $18,000. During one month, Mac had net purchases of $42,000. Net sales at retail for the month were $49,000. The estimated cost of ending inventory using the gross profit method is:

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):

Calculate estimated cost of ending inventory using the gross profit method: Gross profit on sales 40\% Beg inventory Aug 1, 2017 \ 38,000 Net purchases \ 9,900 Net sales at retail for June \ 27,000

Companies with homogeneous products might use the weighted-average method.

In the specific identification method, the flow of goods and the flow of costs are not the same.

With Department A. Sales of $200,000, Department B. Sales of $600,000, and overhead expense to be allocated of $25,000, the distribution of overhead to Department A. based on sales is:

Using the retail method, calculate the value of ending inventory at cost for Morse Co. Round the cost ratio to the nearest hundredth. Cost Retail Beginning Inventory \ 130,000 \ 190,000 Purchases during year \ 90,000 \ 135,000 Sales for year: \ 140,000

The cost flow tends to follow the physical flow when FIFO is used.

Calculate a cost ratio for the following: Cost of goods available for sale at cost: $47,123 Cost of goods available for sale at retail: $55,605

Assume Staley's had net sales of $72,000 per day, beginning inventory of $22,000, and ending inventory at retail of $18,900. What was the inventory turnover at retail?

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.

Inventory value means the flow of costs does not always match the flow of goods.

The cost ratio in the retail method is found by the cost of goods available for sale at cost divided by:

Given: Department A. 8,000 sq. ft., Department B. 5,000 sq. ft., and Department C. 6,000 sq. ft. The percent of overhead expense applied to Department C to the nearest whole percent will be:

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

Johnson Co. uses the retail inventory method. From the following data what is the estimated ending inventory at cost? Net purchases at cost $33,000, beginning inventory at cost $27,000, beginning inventory at retail $35,000, net purchases at retail $45,000, retail sales $70,000.

Match the following terms with their definitions. -FIFO

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:

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?