Question 1

The adjusted ending retail book value multiplied by the cost complement equals the ending inventory value at cost.

Accepted Answer

A) True 
 B)False  False

Question 2

An electronics retailer has a beginning-of-year inventory (at cost)of $400,000; its ending inventory (at cost)is $410,000.Yearly purchases are $700,000 and transportation charges equal $25,000.The retailer's merchandise available for sale is ________.

Accepted Answer

A)  $ 225,000 
B)  $ 715,000 
C)  $1,125,000 
D)  $1,225,000 
A)  $ 225,000 
B)  $ 715,000 
C)  $1,125,000 
D)  $1,225,000 C

Question 3

A retailer has a beginning inventory (at cost)of $96,000,purchases (at cost)of $107,000,and transportation charges of $1,000.Its merchandise available for sale is $203,000.

Accepted Answer

A) True 
 B)False  False

Question 4

A retailer has anticipated yearly expenses of $300,000,a net profit objective of $30,000,planned reductions of $50,000,and planned net sales of $1,000,000.What is its required initial markup percentage?

Accepted Answer

A)  30.0 
B)  33.0 
C)  36.2 
D)  38.0 
A)  30.0 
B)  33.0 
C)  36.2 
D)  38.0

Question 5

Merchandise available for sale equals ________.

Accepted Answer

A)  sales less cost of goods sold 
B)  ending inventory less beginning inventory 
C)  cost of goods sold less ending inventory 
D)  beginning inventory plus purchases plus transportation charges 
A)  sales less cost of goods sold 
B)  ending inventory less beginning inventory 
C)  cost of goods sold less ending inventory 
D)  beginning inventory plus purchases plus transportation charges

Question 6

A retailer uses a 30-unit reorder point,based on assuming a 5-day lead time,a 5-day usage rate,and a 5-unit safety stock.For how many days will a stockout occur if the lead time becomes 8 days and the usage rate continues at 5 units per day?

Accepted Answer

A)  0 days 
B)  1 day 
C)  2 days 
D)  3 days 
A)  0 days 
B)  1 day 
C)  2 days 
D)  3 days

Question 7

Open-to-buy is the difference between planned purchases and purchase commitments already made by a buyer for that month.

Accepted Answer

A) True 
 B)False

Question 8

The economic order quantity formulas seek to trade-off which two costs?

Accepted Answer

A)  order processing and holding costs 
B)  direct costs and indirect costs 
C)  out-of-pocket and cash flow costs 
D)  out-of-pocket and opportunity costs 
A)  order processing and holding costs 
B)  direct costs and indirect costs 
C)  out-of-pocket and cash flow costs 
D)  out-of-pocket and opportunity costs

Question 9

Automatic reorder systems can best be used for ________.

Accepted Answer

A)  goods with high seasonality 
B)  staples 
C)  goods purchased using negotiation 
D)  goods with uncertain fashion cycles 
A)  goods with high seasonality 
B)  staples 
C)  goods purchased using negotiation 
D)  goods with uncertain fashion cycles

Question 10

A retailer's ending retail book value of inventory is $165,000.A physical inventory (at retail)equals $177,000.The retailer ________.

Accepted Answer

A)  switched from LIFO to FIFO 
B)  switched from FIFO to LIFO 
C)  has a stock shortage of $12,000 
D)  has a stock overage of $12,000 
A)  switched from LIFO to FIFO 
B)  switched from FIFO to LIFO 
C)  has a stock shortage of $12,000 
D)  has a stock overage of $12,000

Question 11

A retailer uses the weeks' supply method of inventory-level planning.Average weekly sales during a four-month period are forecast to be $10,000; the retailer wants to stock six weeks of merchandise.What should the planned average inventory level be during this period?

Accepted Answer

A)  $ 10,000 
B)  $ 48,000 
C)  $ 60,000 
D)  $240,000 
A)  $ 10,000 
B)  $ 48,000 
C)  $ 60,000 
D)  $240,000

Question 12

A retailer expects monthly sales to be $500,000 and planned reductions from sales to be $10,000.The retailer wants ending inventory to be $120,000 more than beginning inventory.Planned purchases at retail are ________.

Accepted Answer

A)  $380,000 
B)  $410,000 
C)  $510,000 
D)  $630,000 
A)  $380,000 
B)  $410,000 
C)  $510,000 
D)  $630,000

Question 13

A plan that specifies which products are purchased,when products (goods and services)are purchased,and how many products are purchased is a ________ plan.

Accepted Answer

A)  unit control 
B)  dollar control 
C)  basic stock 
D)  financial merchandise 
A)  unit control 
B)  dollar control 
C)  basic stock 
D)  financial merchandise

Question 14

Differentiate between dollar and unit control.

Accepted Answer

Dollar control and unit control are two

Question 15

A major disadvantage to the retail method of accounting is that ________.

Accepted Answer

A)  book inventory value cannot be computed 
B)  the bookkeeping burden of keeping cost- and price-related data is considerable 
C)  perpetual inventory systems must be maintained 
D)  it does not reflect markdowns 
A)  book inventory value cannot be computed 
B)  the bookkeeping burden of keeping cost- and price-related data is considerable 
C)  perpetual inventory systems must be maintained 
D)  it does not reflect markdowns

Question 16

A stationery store estimates that it can sell 2,000 inexpensive pens each year.Each pen costs the store $.20; holding costs equal 20 percent of unit costs and order costs are $10 per order.The economic order quantity is ________.

Accepted Answer

A)  300 pens 
B)  333 pens 
C)  500 pens 
D)  1,000 pens 
A)  300 pens 
B)  333 pens 
C)  500 pens 
D)  1,000 pens

Question 17

A major advantage to the retail method of accounting is the ________.

Accepted Answer

A)  ease of preparing periodic financial statements 
B)  freedom from ever having to take a physical inventory 
C)  accuracy of the cost complement figure in approximating cost 
D)  ability to directly compute net profits 
A)  ease of preparing periodic financial statements 
B)  freedom from ever having to take a physical inventory 
C)  accuracy of the cost complement figure in approximating cost 
D)  ability to directly compute net profits

Question 18

The use of pegboard displays with minimum inventory quantities noted on each location illustrates a ________ system.

Accepted Answer

A)  perpetual 
B)  point-of-sale 
C)  stock-counting 
D)  visual inspection 
A)  perpetual 
B)  point-of-sale 
C)  stock-counting 
D)  visual inspection

Question 19

A firm with a gross margin as a percent of sales of 20 and a sales-to-stock ratio of 10 has a GMROI of ________.

Accepted Answer

A)  20 
B)  75 
C)  200 
D)  400 
A)  20 
B)  75 
C)  200 
D)  400

Question 20

GMROI combines gross profit and financial leverage measures.

Accepted Answer

A) True 
 B)False

The adjusted ending retail book value multiplied by the cost complement equals the ending inventory value at cost.

An electronics retailer has a beginning-of-year inventory (at cost)of $400,000; its ending inventory (at cost)is $410,000.Yearly purchases are $700,000 and transportation charges equal $25,000.The retailer's merchandise available for sale is ________.

A retailer has a beginning inventory (at cost)of $96,000,purchases (at cost)of $107,000,and transportation charges of $1,000.Its merchandise available for sale is $203,000.

A retailer has anticipated yearly expenses of $300,000,a net profit objective of $30,000,planned reductions of $50,000,and planned net sales of $1,000,000.What is its required initial markup percentage?

Merchandise available for sale equals ________.

A retailer uses a 30-unit reorder point,based on assuming a 5-day lead time,a 5-day usage rate,and a 5-unit safety stock.For how many days will a stockout occur if the lead time becomes 8 days and the usage rate continues at 5 units per day?

Open-to-buy is the difference between planned purchases and purchase commitments already made by a buyer for that month.

The economic order quantity formulas seek to trade-off which two costs?

Automatic reorder systems can best be used for ________.

A retailer's ending retail book value of inventory is $165,000.A physical inventory (at retail)equals $177,000.The retailer ________.

A retailer uses the weeks' supply method of inventory-level planning.Average weekly sales during a four-month period are forecast to be $10,000; the retailer wants to stock six weeks of merchandise.What should the planned average inventory level be during this period?

A retailer expects monthly sales to be $500,000 and planned reductions from sales to be $10,000.The retailer wants ending inventory to be $120,000 more than beginning inventory.Planned purchases at retail are ________.

A plan that specifies which products are purchased,when products (goods and services)are purchased,and how many products are purchased is a ________ plan.

Differentiate between dollar and unit control.

A major disadvantage to the retail method of accounting is that ________.

A stationery store estimates that it can sell 2,000 inexpensive pens each year.Each pen costs the store $.20; holding costs equal 20 percent of unit costs and order costs are $10 per order.The economic order quantity is ________.

A major advantage to the retail method of accounting is the ________.

The use of pegboard displays with minimum inventory quantities noted on each location illustrates a ________ system.

A firm with a gross margin as a percent of sales of 20 and a sales-to-stock ratio of 10 has a GMROI of ________.

GMROI combines gross profit and financial leverage measures.

An Introduction to Retailing

Building and Sustaining Relationships in Retailing

Strategic Planning in Retailing

Retail Institutions by Ownership

Retail Institutions by Store-Based Strategy Mix

Web, nonstore-Based, and Other Forms of Nontraditional Retailing

Identifying and Understanding Consumers

Information Gathering and Processing in Retailing

Trading-Area Analysis

Site Selection

Retail Organization and Human Resource Management

Operations Management: Financial Dimensions

Operations Management: Operational Dimensions

Developing Merchandise Plans

Implementing Merchandise Plans

Pricing in Retailing

Establishing and Maintaining a Retail Image

Promotional Strategy

Integrating and Controlling the Retail Strategy

Filters

Exam 16: Financial Merchandise Management

The adjusted ending retail book value multiplied by the cost complement equals the ending inventory value at cost.

An electronics retailer has a beginning-of-year inventory (at cost)of $400,000; its ending inventory (at cost)is $410,000.Yearly purchases are $700,000 and transportation charges equal $25,000.The retailer's merchandise available for sale is ________.

A retailer has a beginning inventory (at cost)of $96,000,purchases (at cost)of $107,000,and transportation charges of $1,000.Its merchandise available for sale is $203,000.

A retailer has anticipated yearly expenses of $300,000,a net profit objective of $30,000,planned reductions of $50,000,and planned net sales of $1,000,000.What is its required initial markup percentage?

Merchandise available for sale equals ________.

A retailer uses a 30-unit reorder point,based on assuming a 5-day lead time,a 5-day usage rate,and a 5-unit safety stock.For how many days will a stockout occur if the lead time becomes 8 days and the usage rate continues at 5 units per day?

Open-to-buy is the difference between planned purchases and purchase commitments already made by a buyer for that month.

The economic order quantity formulas seek to trade-off which two costs?

Automatic reorder systems can best be used for ________.

A retailer's ending retail book value of inventory is $165,000.A physical inventory (at retail)equals $177,000.The retailer ________.

A retailer uses the weeks' supply method of inventory-level planning.Average weekly sales during a four-month period are forecast to be $10,000; the retailer wants to stock six weeks of merchandise.What should the planned average inventory level be during this period?

A retailer expects monthly sales to be $500,000 and planned reductions from sales to be $10,000.The retailer wants ending inventory to be $120,000 more than beginning inventory.Planned purchases at retail are ________.

A plan that specifies which products are purchased,when products (goods and services)are purchased,and how many products are purchased is a ________ plan.

Differentiate between dollar and unit control.

A major disadvantage to the retail method of accounting is that ________.

A stationery store estimates that it can sell 2,000 inexpensive pens each year.Each pen costs the store $.20; holding costs equal 20 percent of unit costs and order costs are $10 per order.The economic order quantity is ________.

A major advantage to the retail method of accounting is the ________.

The use of pegboard displays with minimum inventory quantities noted on each location illustrates a ________ system.

A firm with a gross margin as a percent of sales of 20 and a sales-to-stock ratio of 10 has a GMROI of ________.

GMROI combines gross profit and financial leverage measures.

An Introduction to Retailing

Building and Sustaining Relationships in Retailing

Strategic Planning in Retailing

Retail Institutions by Ownership

Retail Institutions by Store-Based Strategy Mix

Web, nonstore-Based, and Other Forms of Nontraditional Retailing

Identifying and Understanding Consumers

Information Gathering and Processing in Retailing

Trading-Area Analysis

Site Selection

Retail Organization and Human Resource Management

Operations Management: Financial Dimensions

Operations Management: Operational Dimensions

Developing Merchandise Plans

Implementing Merchandise Plans

Pricing in Retailing

Establishing and Maintaining a Retail Image

Promotional Strategy

Integrating and Controlling the Retail Strategy

Filters