Exam 20: Inventory Management and Variable and Absorption Costing

Exhibit 20-2 Calumet Company sells slippers. The following information is available for Calumet's inventory for 2011: Refer to Exhibit 20-2. Calculate Calumet's order costs for the year.

When comparing balance sheets, which type of company has an inventory of work-in-process services?

Which of the following is the income statement formula for the absorption costing method?

Which inventory costing method calculates operating income?

Exhibit 20-4 The Hanover Catalog Company has the following information available concerning one of its inventory items: Refer to Exhibit 20-4. The reorder point with safety stock for this inventory item is:

A short formula to calculate the reorder point with safety stock is:

Franklin Company manufactures picture frames. The following information is available for 2011: Create an income statement for Franklin Company using the variable costing method.

Portage Company made the following inventory purchases during the year: If Portage Company's cost of capital is 14%, what is the amount of its holding costs for the year?

Which of the following is an opportunity cost associated with financial holding costs?

Which of the following is the income statement formula for the variable costing method?

Exhibit 20-1 The following information is for Saratoga Company: Refer to Exhibit 20-1. Determine the number of days in finished goods inventory. Assume a 365-day year.

Exhibit 20-1 The following information is for Saratoga Company: Refer to Exhibit 20-1. Determine the number of days in ending raw materials inventory. Assume Saratoga uses a 365-day year.

EOQ is used to determine:

Which inventory costing method expenses all selling and administrative expenses to the income statement in the period in which these costs occurred?

Exhibit 20-1 The following information is for Saratoga Company: Refer to Exhibit 20-1. Determine the inventory turnover for work-in-process inventory.

Which of the following is a disadvantage of low inventory levels?

Which inventory costing method allows net income to be manipulated by changing production levels?

Maintaining too little inventory causes all but which of the following problems?

When calculating ROI on inventory, inventory turnover is calculated by:

Creasly Company has an economic order quantity of 300 units for item B of inventory. The annual demand for the product is 5,625 units, and the unit carrying cost is $4.00. What is the cost of placing an order?