Question 1

What type of firm would have a large inventory of goods completed and ready to sell?

Accepted Answer

A)  Service 
B)  Manufacturing 
C)  Merchandising 
D)  Both manufacturing and merchandising 
A)  Service 
B)  Manufacturing 
C)  Merchandising 
D)  Both manufacturing and merchandising

Question 2

The following end of year information is given for Ashland Company:
  
Calculate the following items (assume a 365-day year):

Accepted Answer

Calculate the follow

Question 3

Swanson Supplies has an economic order quantity of 100 units for item X of inventory. The annual demand for the product is 1,400 units and the cost to place an order is $25. What is the unit carrying cost?

Accepted Answer

A)  $3.50 
B)  $7.00 
C)  $14.00 
D)  $10.00 
A)  $3.50 
B)  $7.00 
C)  $14.00 
D)  $10.00

Question 4

Carrying too much inventory can cause which of the following problems?

Accepted Answer

A)  Increase in ordering costs 
B)  Increase in inventory shrinkage 
C)  Decreased bulk order discounts 
D)  Increased risk of price increases 
A)  Increase in ordering costs 
B)  Increase in inventory shrinkage 
C)  Decreased bulk order discounts 
D)  Increased risk of price increases

Question 5

The CPA firm of Peck, Williams, and Shafner is conducting an audit of Monolith Enterprises. The audit is estimated to take 4 months to complete and will use $4,000 in supplies, $200,000 in labor, and $320,000 in overhead. Peck's annual rate is 18%. At the end of the fourth month, Peck finds that the audit will take an additional 2 months to complete and another $200,000 in labor and overhead. What are the additional financial holding costs for the 2 extra months on this project?

Accepted Answer

A)  $0 
B)  $3,000 
C)  $18,720 
D)  $21,720 
A)  $0 
B)  $3,000 
C)  $18,720 
D)  $21,720

Question 6

Match between columns
                        Premises: Selling and administrative expenses
Direct labor
Operating income
Work-in-process services
Gross margin
Raw materials inventory
Purchases of materials
Merchandise inventory
Finished goods inventory
Over/underapplied manufacturing/service overhead
Selling and administrative expenses
Work-in-process inventory
Cost of goods/services sold
Supplies inventory
Applied manufacturing/service overhead

Accepted Answer

The Answer of Manufacturing and Service and Merchandising is...

Question 7

During 2011, the Lianro Company had sales of $375,000 and cost of goods sold of $281,250. Merchandise inventory at the beginning of the year was $118,000 and at the end of the year, it was $124,000. The return on investment in inventory was:

Accepted Answer

A)  4.8% 
B)  75.6% 
C)  77.5% 
D)  232% 
A)  4.8% 
B)  75.6% 
C)  77.5% 
D)  232%

Question 8

Merchandising companies can have holding costs associated with merchandise inventory. In service firms, the account that would have a comparable holding cost would be:

Accepted Answer

A)  Overhead 
B)  Cost of Services 
C)  Accounts Payable 
D)  Work-in-Process Services 
A)  Overhead 
B)  Cost of Services 
C)  Accounts Payable 
D)  Work-in-Process Services

Question 9

The formula for inventory turnover is:

Accepted Answer

A)  Cost of goods sold ¸ average inventory 
B)  Cost of goods manufactured ¸ average inventory 
C)  Cost of goods sold ¸ cost of goods manufactured 
D)  Average inventory × cost per unit 
A)  Cost of goods sold ¸ average inventory 
B)  Cost of goods manufactured ¸ average inventory 
C)  Cost of goods sold ¸ cost of goods manufactured 
D)  Average inventory × cost per unit

What type of firm would have a large inventory of goods completed and ready to sell?

The following end of year information is given for Ashland Company: Calculate the following items (assume a 365-day year):

Swanson Supplies has an economic order quantity of 100 units for item X of inventory. The annual demand for the product is 1,400 units and the cost to place an order is $25. What is the unit carrying cost?

Carrying too much inventory can cause which of the following problems?

During 2011, the Lianro Company had sales of $375,000 and cost of goods sold of $281,250. Merchandise inventory at the beginning of the year was $118,000 and at the end of the year, it was $124,000. The return on investment in inventory was:

Merchandising companies can have holding costs associated with merchandise inventory. In service firms, the account that would have a comparable holding cost would be:

The formula for inventory turnover is:

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters

Exam 20: Inventory Management and Variable and Absorption Costing

What type of firm would have a large inventory of goods completed and ready to sell?

The following end of year information is given for Ashland Company: Calculate the following items (assume a 365-day year):

Swanson Supplies has an economic order quantity of 100 units for item X of inventory. The annual demand for the product is 1,400 units and the cost to place an order is $25. What is the unit carrying cost?

Carrying too much inventory can cause which of the following problems?

During 2011, the Lianro Company had sales of $375,000 and cost of goods sold of $281,250. Merchandise inventory at the beginning of the year was $118,000 and at the end of the year, it was $124,000. The return on investment in inventory was:

Merchandising companies can have holding costs associated with merchandise inventory. In service firms, the account that would have a comparable holding cost would be:

The formula for inventory turnover is:

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Cost Flows and Business Organizations

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

Filters