Exam 20: Inventory Management, just-In-Time, and Simplified Costing Methods

Answer the following questions using the information below: Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $0.75 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 155,520 golf balls at a rate of 2,991 balls per week. Martin's Golf Supplies earns 12% on its cash investments. The purchase-order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order \1 25.00 arrying costs per carton per year: Relevant insurance, materials handling, breakage, etc., per year \0 .77 -Purchasing at the EOQ recommended level,what are the relevant total costs?

The journal entry to dispose of the difference between actual conversion costs incurred and standard conversion costs allocated is different under backflush costing and sequential tracking.

The purchase-order lead time is the ________.

Lean accounting is much simpler than traditional product costing.Why?

Beryl Company sells 500 flash drives per week.Purchase-order lead time is 1 1/2 weeks and the economic-order quantity is 1,125 units.What is the reorder point?

The costs that result from theft of inventory are ________.

Which of the following statements best defines a trigger point in a sequential-tracking costing system?

Which of the following statements is true of costs associated with goods for sale?

Answer the following questions using the information below: Globe Inc. is a distributor of DVDs. DVD Mart is a local retail outlet which sells blank and recorded DVDs. DVD Mart purchases tapes from Globe at $25.00 per DVD; DVDs are shipped in packages of 60. Globe pays all incoming freight, and DVD Mart does not inspect the DVDs due to Globe's reputation for high quality. Annual demand is 312,000 DVDs at a rate of 6,000 DVDs per week. DVD Mart earns 15% on its cash investments. The purchase-order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order \1 14.50 arrying costs per package per year: Relevant insurance, materials handling, breakage, etc., per year \4 .50 -What are the relevant total costs?

Among different types of costs associated with inventory,the costs of obtaining purchase approvals are ________.

The economic order quantity model completely ignores ________.

A "push-through" system,often described as a materials requirement planning system,focuses first on the forecasted amount and timing of finished goods and then determines the demand for materials components and subassemblies at each of the prior stages of production.

Answer the following questions using the information below: Short Grass Incorporated is a distributor of golf balls. Martin's Golf Supplies is a local retail outlet which sells golf balls. Martin's purchases the golf balls from Short Grass Incorporated at $0.75 per ball; the golf balls are shipped in cartons of 72. Short Grass Incorporated pays all incoming freight, and Martin's Golf Supplies does not inspect the balls due to Short Grass' reputation for high quality. Annual demand is 155,520 golf balls at a rate of 2,991 balls per week. Martin's Golf Supplies earns 12% on its cash investments. The purchase-order lead time is one week. The following cost data are available: Relevant ordering costs per purchase order \1 25.00 arrying costs per carton per year: Relevant insurance, materials handling, breakage, etc., per year \0 .77 -Purchasing at the EOQ recommended level,how many deliveries will be made during each time period?

Freight in charges forms part of purchasing costs of inventory.

Backflush costing is a costing method that supports creating value for the customer by costing the entire value stream thereby eliminating waste in the accounting process.

The time from when an order is received until it becomes a finished good is referred to as ________.

Answer the following questions using the information below: Vision Company sells optical equipment. Blitz Company manufactures special glass lenses. Vision orders 11,400 lenses per year, 200 per week, at $35 per lens. Blitz covers all shipping costs. Vision earns 25% on its cash investments. The purchase-order lead time is 2.5 weeks. Vision sells 225 lenses per week. The following data are available: Relevant ordering costs per purchase order \4 1.25 Relevant insurance, materials handling, breakage, and so on, per year 4.50 -What is the reorder point?

Under economic-order-quantity decision model,it is assumed that ________.

Just-in-time production system comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities.

The demand-pull feature of JIT production systems results in close coordination among workstations and smooths the flow of goods.