Exam 20: Inventory Management and Variable and Absorption Costing

Use the following information to prepare a cost of goods manufactured schedule for Beaverton Company for the year ended December 31, 2011:

Lead time is the:

The consulting firm of Howe and Biggs is currently conducting a large consulting assignment for Spaeth Industries. Howe has calculated that the financial holding costs of this 3-month project are $6,000. If the project will use $600,000 in supplies, labor, and overhead, Howe's cost of capital must be:

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 overhead cost for the year.

Hannafin Company decreased the size of inventory order quantities below the quantity determined by EOQ. If annual quantity demanded remains the same, the number of orders made during the year will:

The return on inventory investment formula is:

Exhibit 20-3 Florence Company sells lawn mowers. The following information is available for Florence's inventory for 2011: Refer to Exhibit 20-3. Calculate Florence's lost discount for the year.

When comparing income statements, which type of company does not have a section for selling and general administrative expenses?

Maintaining smaller inventories should lead to:

The formula for a typical income statement is:

Which inventory costing method creates an incentive to build up excess inventory?

Use of the ROI formula can help a company:

Exhibit 20-5 Barron Company manufactured 150,000 units during the year but only sold 130,000 of these units. At the beginning of the year, Barron had no beginning finished goods inventory. The following unit costs were incurred during the year: Refer to Exhibit 20-5. If Barron Company sold each unit for $13, what is Barron's net income for the year using variable costing?

Exhibit 20-5 Barron Company manufactured 150,000 units during the year but only sold 130,000 of these units. At the beginning of the year, Barron had no beginning finished goods inventory. The following unit costs were incurred during the year: Refer to Exhibit 20-5. Using variable costing, what is the value of Barron's finished goods inventory at the end of the year?

Exhibit 20-1 The following information is for Saratoga Company: Refer to Exhibit 20-1. Determine the inventory turnover for the finished goods inventory.

Workman Industries had the following financial information for the years 2011 and 2012: Calculate Workman's ROI in inventory for 2012.

Which inventory costing method is required by GAAP?

Which inventory costing method assigns fixed production costs to inventory so as to report the full cost of creating inventory?

Which inventory costing method calculates contribution margin instead of gross margin?

For the year ended 2011, Equine Supplies had cost of goods sold of $280,000 and gross margin of $400,000. Inventory levels were as follows: $40,000 at December 31, 2010 and $44,000 at December 31, 2011. ROI in inventory is: